With prime holidays coming, the ski runs are open, STRs and restaurants are closed.
Market Summary – November 29 to December 13
The Mammoth Lakes MLS is reporting 29 real estate closings for the period ranging from a low of $280,000 to a high of $2,625,000. Demand remains strong but the inventory continues to drift lower. Mammoth has become a “just buy anything” market for now. Of the 29 closings, 28 were financeable properties and 22 were financed closings. Just like the previous period, the four (4) highest sales for the period were all single-family homes selling for over $1.6M. This is really an amazing statistic for the Mammoth market. It would be comparable to a year’s worth of activity in this segment of the market in just 30 days. There were 11 condo closings under $426,000, but still no real appreciation in this segment of the market. There was one (1) more vacant residential lot closing and this again was at an impressive number. There were two (2) Snowcreek closings. There was one (1) commercial closing in the Industrial Park. This period last year there were 14 closings in Mammoth Lakes.
The 10-year Treasury yield flirted with going over 1% but ended the period just slightly up at .893%. A word to the wise for current buyers; choose your lenders carefully. Less proficient loan officers appear to be having trouble getting loans through underwriting (the “turn-around”). I haven’t been able to detect the cause, whether it is a work-from-home issue or simply greater scrutiny by the underwriters. At this point in the market I would not let a seller accept an offer from a buyer using an unproven loan officer.
Condominium Inventory
At the period’s end the condominium inventory is down another nine (9) to 19. And this still includes the eight (8) Westin Monache units that continue to sit on the market. There were 10 new condo listings brought to the market during the period and seven (7) have already gone to escrow. There are currently 78 condos in escrow. This time last year there were 64 condos on the market, two years ago 97.
Single-Family Inventory
The inventory of single-family homes is down four (4) to 17. The Mammoth residential market is completely ridiculous. The least expensive home on the market is now $1,190,000 and it was the only new residential listing for the period. There are only seven (7) homes listed under $2,150,000 and only 11 under $3,300,000. This time last year there were 64 homes on the market. Interestingly, two years ago there were only 33 homes on the market.
Pending Transactions
The total number of properties in “pending” (under contract) in Mammoth Lakes is up one (1) to 98 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up seven (7) to 127. This time last year it was 54 and 79 respectively. As we move to the year-end holidays it is normal to see these numbers drop, but what has been normal in 2020?
Market Updates and News
The southern California lockdowns (Stay-At-Home) were wrapped around Mammoth Lakes and Mono County and will be in place until December 28, but will likely last longer. Like much of SoCal, there is a large volume of local Covid testing going on and a significant number of positive cases. The massive volume of positive cases at the Marine base in north County are not being counted in the local numbers. As of right now Mammoth Hospital remains in “green” status. Oddly, nobody seems to be condemning high-risk activities this time around to keep people out of the medical facilities. The Park is open.
It is going to be a difficult time for the businesses who normally reap the bounty of this holiday period. Restaurants and bars are closed and limited to take-away food and beverages. Once there are actually more people in town (it is inevitable) some operators will try to step-up their to-go food operations. We are already seeing this. Maybe the “in thing” will be cruising Old Mammoth Road and stopping for food and beverages and hanging out a bit. We’ll see who gets creative and energetic. This has always been the secret to success for tourism related businesses in Mammoth.
As of last week the Town Council approved $750,000 in rental and business assistance with many of the same requirements from months ago. And the local food bank is being reformulated. As my readers know, I have always promoted a conservative financial position for the Town. That’s from experience. The next month or two the Town will be shouldering all of this assistance and losing millions in bed tax (TOT). Last December and January produced nearly $6,000,000 in TOT. This is why a strong Fund for Economic Uncertainty is so important.
The Town reported record TOT numbers in July and August. Short term rentals (STR) are prohibited under the lockdown but with the Ski Area open I suspect there will be owners who let “friends” use their properties. Resistance may become the norm. But the Town will be watching. It could actually be a good period for second homeowners who don’t rely on rental income –– lighter crowds and a mellow vibe. And no need to try to impress anybody.
So far there has been no expressed “stay away” mandate for second homeowners like the last lockdown. If properties aren’t rented these second homeowners are likely to come too. There will undoubtedly be some sort of crowd in Mammoth during these upcoming holidays. And real estate buyers who are currently in escrow are anxious to close so they can come and stay.
There was some fresh snow today and we’ll see if it is enough to make a significant difference in the ski conditions. Mammoth Mountain crews moved their snowmaking operations into the Canyon Lodge and Eagle Base areas during the period. Colder night-time temperatures certainly helped. The snowmakers are doing what they normally do with these drought-like conditions. They have become very good at it. Ironically, the less-than-great ski conditions would probably have many holiday renters looking to cancel their reservations in a normal year. But I hear the ice skating is good.
The 80/50 fractional project in the Village has gone through several strange iterations. It is a fine and popular lodging facility. It was never fully built-out and just a few years ago there was a failed attempt to complete and expand it. The developer at that time wanted to build an adjoining tower of eight or nine stories. That was rejected. It went through receivership and has had different owners. The Auberge Resorts group owned it at one time but that didn’t work out. More recently the remaining unsold fractional shares were purchased at deep discount by the Association. That triggered a property tax re-assessment of the property from $14M to $4M. Now the shares are being sold at low prices and there are buyers. In the past one of the appeals of the project has been the existing owner’s ability to “use” the unoccupied time in the project. With fewer and fewer remaining unsold fractional shares this opportunity will get squeezed out. We’ll see how popular it is once owners are limited to their specific dates.
I reported a month ago that the Airbnb IPO was coming and could be valued in the $30-35 billion range. Airbnb has certainly had an interesting past 12 months. But this past week the IPO was released and to say it went bonkers would be an understatement. The initial per share sales price was set at $68 which would equate to a $47 billion valuation. The price immediately jumped to $146 per share, went to $168 per share and came back down to $140 per share, all in the first day. Now it seems to be sticking in this range. Crazy, but it is 2020….With all of this new liquidity it will be interesting to see how they conduct business, whether they will be more generous to the hosts or guests, offer enhanced services to either, or?? Hopefully, the end users benefit somehow.
Noteworthy Sales
The modern-styled “spec” home in Fairway Ranch closed for $2,495,000 or $683 per-square foot. This is a big number considering there is nothing really special about the lot except that itFour 1 bedroom and Studio condominium sales from Sherwin Villas at $280,000 to Mammoth Estates at $350,000 show that these small unit valuations continue to be relatively flat. Interior improvements can move the values up but this is true with any properties in Mammoth. There is a large inventory of these units that were built in the 1960s, 70s and 80s. But demand hasn’t outstripped supply yet. This is especially interesting because these units typically produce some of the best ROI in the STR market…. A 2 + loft /at Sierra Park Villas closed for $419,000. No real appreciation there either.
A 2 bedroom / 2 bath “flat” (no garage) in Snowcreek IV closed for $540,000. My office closed two of these units in early summer for $100,000 less. Real appreciation in Snowcreek.
Favorite New Listing For The Period!
Between this property having four bedrooms (people are looking for “size”) and the fact there are only 11 non-Westin condos on the market AND this is close to Canyon Lodge (and it is almost winter), this is bound to be popular. Here’s a 4 bedroom / 2 bath townhome at Mammoth West. This is a little different because you enter into the living level and there are three bedrooms downstairs. So there is a bedroom and bath on the entry level for anyone who can’t do stairs. The great room features lots of south facing windows with views of Laurel Mtn., the Sherwins and Lincoln Mtn. on the Ski Area. The condition is rather vintage but there is a washer/dryer in the property and propane gas retrofitting is possible. Nice pool and spa area. Good access to Forest Service land for mountain biking and dog walking.
Listed at $669,000
Other Real Estate News
I recently received a question from a reader pertaining to the impacts of work-from-home (WFH) on Mammoth Lakes and local real estate. It doesn’t seem like a question that warrants a lengthy column but certainly is worth discussing.
Since the end of the last lockdown on June 1, there is high demand and a significant volume of sales in the residential and higher-end condominium segments of this market. There is also an upward trend in values in these segments. This is being largely driven by interest in WFH in Mammoth Lakes. These buyers don’t appear to be wanting to make their new Mammoth homes their primary residence. At least not yet. But they do intend to spend extended periods of time here.
They are typically looking for properties that have some extra space that can accommodate their specific WFH needs. Some just need a small desk space. Others want a dedicated office that includes a certain amount of privacy. Ideally, the new “office” location has some mountain views or natural light. In many cases these new buyers really need two or more “office” spaces. And as I have talked about repeatedly, high speed Internet service is imperative (and even though dealing with Suddenlink can sometimes feel like a lobotomy, the local service can be great, at least most of the time).
The WFH trend also includes the kids or grandkids. We have learned that day-to-day business requires some separation from them at times. But they need their own spaces (and bandwidth) too. So this warrants an even larger property and more rooms. Some of these buyers who have recently purchased are going to find they need even more space. And I anticipate that some (many?) will end up building their own custom home that meets all of their criteria.
One of the concerns about the whole WFH trend and real estate is the ultimate impact on commercial real estate and specifically office properties. It is going to take its toll in many metropolitan markets. But in Mammoth it may be slightly different. Many of the new Mammoth WFH participants may find a small office in town may be an even better solution. There are obviously no long commutes but privacy and a real work environment can be created. And with none of the “home” distractions. But with all of the flexibility of working from home.
I’ve basically operated this way for the past six years and it works very well for me. I can still go play any time I want. But when I’m at the office I am in work mode. For me it is the essence of small town living.
All of this will certainly evolve over time. For the most part I expect the trend and market conditions to continue. Recent buyers will shift gears as they experience the lifestyle and options available. Maybe the Sierra Center won’t be renovated into a hotel. Maybe it will revert back to an office building with a bunch of small private offices. It may even have a water cooler where the real work happens.
Thanks for reading! I’ll be back in three weeks. Have a great holiday, whatever you are celebrating!! Stay healthy and sane!
If you know anyone interested in buying or selling real estate in the Mammoth region, please send them my way!