The Smoke Lingers But Visitors Are Anxious To Come And Play!
Market Summary September 27 to October 18
This report is for the past three weeks. The Mammoth Lakes MLS is reporting 72 real estate closings for the period ranging from a low of $147,500 to a high of $3,600,000. Again, the volume of closings remains very high and consistent. Of the 72 closings, there were 69 financeable properties and 55 were conventionally financed. Obviously buyers are wanting to take advantage of the great mortgage rates. There were two (2) low-end vacant lot closings and a whopping 30 condos under $500,000 closed. There were three (3) homes over $2,000,000 closed. The first three Obsidian Villas properties finally closed. There were only five (5) Snowcreek closings. The 10-year Treasury yield ended the period up slightly at .744%. Transaction volume has slowed somewhat but buyers don’t have much to choose from. Of note, many current high-end purchases are made with ~50% or more down payments. This is an interesting trend from this demographic. Some segments in the Mammoth real estate market are clearly seeing increased values, while others not-so-much. It is basic supply and demand in each segment.
Condominium Inventory
At the period’s end the condominium inventory is down 13 to 43. This is really historic low inventory. In the 1990s it was not unusual to have over 300 condos on the market this time of year. There were 21 new condo listings brought to the market during the period and four (4) have already gone to escrow. The lower-end of the condos market is starting to move somewhat and we may see some price appreciate in this segment at some point. The largest concentration of condo inventory is at The Westin Monache with a total of eight (8) units on the market. The refresh assessment has some impact, but some units are priced significantly higher than recent sales.
Single Family Inventory
The inventory of single-family homes is down one (1) to 27. Again, probably historic low inventory. I showed a brand new residential listing (second day on market) this weekend and I barely left the property and the listing agent let me know there was already an offer. And my clients thought it was overpriced. The low priced Old Mammoth log cabin that has been in escrow a couple of times came back to the market again during the period. There were seven (7) residential home closings above $985,000. This is strong activity for a three week period.
Pending Transaction
The total number of properties in “pending” (under contract) in Mammoth Lakes is down 38 to 120 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down 47 to 156. The hazardous air quality and lack of inventory are all clearly impacting the sales activity. The demand is still here. New listings get strong attention and some receive multiple offers. Frustrated buyers continue to watch the new listings. The market needs more sellers.
Market Updates and News
Life in Mammoth continues to be seriously impacted by the smoke from the nearby Creek Fire. The smoke does come and go including short episodes of clear air, but more often it is heavy smoke and even visible ash. The conditions obviously aren’t great for tourism and recreation, and downright unhealthful for most outdoor activity. Clear air periods are the chance to get some physical outdoor activity in (the temperatures have been unseasonably warm). Many visitors and second homeowners are canceling plans to visit based on negative air quality reporting. This past week there was clear air on Thursday and visitors were visibly moving into town. But they woke up to dense smoke Friday morning that lingered into today.
The Creek Fire is 60% contained and is no threat to Mammoth Lakes at this time. It has burned nearly 350,000 acres and some burning areas are within 10 miles of town. But again, there is a large burned area from two years ago in-between as well as plenty of inflammable stuff called granite. Realistically the fire will burn until rain or snow extinguishes it permanently. There is no precipitation in the 10-day forecast. Seeing the fire fighting helicopters (and their support crews) and the staging camp for fire fighters at Mammoth Airport is a reminder of how important the airport is to the community.
There are some nice fall colors to enjoy when the air clears. The Forest has reopened somewhat but the back country remains closed. Front country trails are accessible and Forest Service management roads are open. Some campgrounds have reopened. Campfires and stoves are prohibited. We’ll never know how crowded Mammoth might be if it weren’t for the smoke. Most visitor related businesses are in a subdued mode, but that is rather normal for this time of year. The balance of businesses are doing what they normally do this time of year — hustling to prepare for winter and what that brings.
The Mammoth Town Council race isn’t exactly “heated” but we are hearing from the candidates. Housing and “Town reserves” have risen to the top of critical issues for the candidates. The local municipality has weathered the Covid crises fairly well and was able to financially support some of the workforce with rent subsidies. Specifically impacted local businesses who weren’t eligible for PPE also received Town monies. Having strong reserves has helped. Nice to see the candidates recognizing this. Initial infrastructure plans for The Parcel have been released. Along with the $20 million grant the Town has received for housing, hopefully we will see road and utility improvements there next summer, which is the first step to seeing actual housing structures built.
Air service to Mammoth may not be on everybody’s mind but it looks like it will happen this winter, and with a few interesting changes. The United flights from Denver, San Francisco and LA will continue much as they did last year but they have been given increased flexibility to lengthen or shorten the season. There will be changes in the regional service. JetSuiteX is gone and is being replaced by Advanced Air. They will be flying out of Hawthorne Airport (LA) twice per week and Carlsbad and Burbank four times per week. The Tourism leaders seem to think demand for air service to mountain resort communities will be very high this winter. We’ll see.
Last fall the Town was busy installing the large “wayfinding” signs around town. Despite their size, they seem to have blended into the scenery just fine. There is no doubt they helped move the massive summer crowds around town more efficiently. This fall the Town is installing new, smaller street signs and this too will be very beneficial for our guests. Mammoth’s local street signs have been a small comedy since incorporation. Some “visionaries” back in the 1980s decided Mammoth’s street signs needed to imbue a unique village theme so we ended up with vertical lettering carved on brown wood posts. There are still a handful of them around town including many inside homes as memorabilia. That didn’t work out so well. Seems people don’t read vertical lettering very well. And the lettering often got buried in snow pack. And they didn’t prove to be very durable.
Next, keeping with the theme, was horizontal carved lettering perched on brown posts. They were better but still not great. Funny how wind-blown snow can fill in the carved letters and the lettering just disappears. No wonder we end-up with so many lost visitors, even with ubiquitous GPS. And even worse, the local developers decided to pick their own signage instead of the “theme” so we’ve ended up with a mish-mash of signage. But this fall the Town has been installing new street signs that are on steel poles with traditional, readable, white lettering on a green backgrounds (feels like suburbia). They are very readable. They are tall enough that they should stand above street snowpack even in the heaviest winters. And they look durable and easily replaceable. Hopefully, they help our guests find their way.
Some readers have asked why I haven’t commented on the Mammoth Lakes Foundation’s recent re-direction. I’d like to wait and see how it all shakes out. But I have been very critical of the Foundation in the past for not following through on one of their original directions. Early on, and with Intrawest as a very interested partner, a portion of the local curriculum was going to be focused on hospitality. The vision was that Mammoth, a small resort with an actual college campus, could become a center for resort hospitality education. Mammoth could not only educate and train their own workforce but could attract students from other resort areas or those who wanted to pursue this field. Intrawest saw it as a potential hub for training employees for their entire system. Think about how this could have benefitted Mammoth and the industry? But the Foundation ultimately didn’t support the vision. The outside corporate buy-in could have been significant too. It really was a natural progression for the college. A couple of years ago I had this discussion with the new executive director who had never really heard of this concept. He seemed intrigued. He admitted the “classrooms are empty” and the campus was highly underutilized. But now he’s gone. I wonder what Dave would think about this? After all great hospitality service can be fun for the guests and the employees.
Noteworthy Sales
Two The Pointe units sold for $825,000 and $828,000. This is a big step up in value for this small condo project located at the top of Chateau Road. Two side-by-side Eagle Run units closed and the second unit closed for $30,000 more.
Fifteen of the closing in the period were condos under $400,000. The selling prices are similar to a year ago. Despite the rest of the market seeing strong appreciation, there is little evidence this segment of the market is seeing it, yet.
The two highest sales were in the Fairway Ranch at $2.1M and $3.6M. This is the only gated residential subdivision in Mammoth. Looks like high-end buyers are looking favorably at being behind a gate these days.
Favorite New Listing for the Period
Snowcreek has been a hot seller all summer long. Here is a 3 bedroom + loft / 2.5 bath end-unit townhome in Phase 3. These multi-level “D” floor plans are unique in the Snowcreek development, even the great room is on different levels. This property features a fully remodeled kitchen with beautiful solid granite counters and a massive stone fireplace. The loft has been partially enclosed for privacy and has a straight view to Mammoth Mountain. Great sun and views. The master bedroom slider opens to the green belt making it perfect for dog lovers. The property is in excellent turn-key condition, ready for winter and rental. See the video tour here.
Listed at $849,000
Other Real Estate News
The HomeLight real estate referral network (you’ve seen their ads on TV) conducted a Q3 2020 Top Agents Insight Report. The responses are interesting and amazingly consistent with the Mammoth market. Here are some highlights;
• The major factor driving the current seller’s market is the ongoing lack of supply – 87% of real estate agents say that inventory in their market is lower than they expected for the quarter compared to only 47% who responded likewise in 2019. And 56% say the supply will remain level or decline in the coming months.
• Multiple offer situations are almost a guarantee at this point and 88% of agents say bidding wars are on the rise or at their peak. Some respondents described the market as “insanely competitive.”
• Despite the competitive market conditions, mortgage rates simultaneously make it a great time to buy. 96% of the agents polled report that the low rates are motivating more buyers. • Combine low supply and robust demand and you get rising property values across the country. At the start of Q2 only 6% of agents were seeing home price escalations in their market. At the end of Q3 it was above 81%.
• Nearly one-third of the agents polled reported that the luxury market, which is typically slower paced due to a more limited buyer pool, is now equally competitive to the lower and mid-tier price points in their markets. 37% of the agents stated that if you have a luxury home to sell, now is a great time to list.
• And what about the future? Nearly 46% believe home values in their markets will continue their upward price trajectory through the end of the year and into 2021. 35% believe values will hold where they are now and 9% are predicting price declines in their areas.
• 76% of the agents polled, some who have been in the business for decades, say that supply has hit rock bottom in their market.
• Homebuyers should expect to offer above asking and make no requests for concessions or closing costs in this market environment. Many are going so far as to write letters (to sellers), make offers sight-unseen, and waive contingencies.
Clearly, 2020 gets crazier by the day! Thanks for reading, stay healthy!