Spectacular Weather & A Substantial Thanksgiving Crowd Moves In-and-Out!
Market Summary November 5 to November 29
The Mammoth Lakes MLS is reporting 19 real estate closings for the period ranging from a low of $325,000 to a high of $2,495,000. This is back to a relatively normal amount of closings for this time of year. Demand is still strong but the available inventory is ridiculously low. Of the 19 closings, 18 were financeable properties and 15 were financed closings. The four (4) highest sales for the period were all single-family homes selling for over $1.7M and they were all financed purchases. The strong high-end real estate activity continues. There were five (5) condo closings under $400,000. There was one (1) vacant residential lot sale at an impressive number. There was only one (1) Snowcreek closing! The 10-year Treasury yield ended the period slightly down at .842%. Some mortgage companies were touting “the lowest rates in history” during the period. While other’s in the industry are warning about substantially higher rates in 2021. Who knows for sure. But the statistics show the current buyers are taking advantage of the low rates.
Condominium Inventory
At the period’s end the condominium inventory is down another two (2) to 28. That still includes the nine (9) Westin Monache units that sit on the market. There were 13 new condo listings brought to the market during the period and six (6) have already gone to escrow. That is telling. Buyers clearly see the lack of inventory and have the desire to tie properties up on the threshold of the winter season
Single Family Inventory
The inventory of single-family homes is down six (6) to 21. There were two (2) new residential listings in the period, both around $1.1M and one we have seen on the market repeatedly in the past. This time around it is likely to sell quick. Historically hard-to-sell properties have been selling in the market of the past six months. For those who like to watch listings and sales on a per-square-foot basis, the best properties are now pushing to or beyond the $500 per-square-foot mark. Interestingly, many local contractors are now estimating construction costs for new properties to be in the $400 per-square-foot range.
Pending Transactions
The total number of properties in “pending” (under contract) in Mammoth Lakes is up seven (7) to 97 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up nine (9) to 128. Low interest rates, beautiful weather, open ski runs and other dynamics continue to push high levels of interest in Mammoth real estate.
Market Updates and News
I’ve often referred to the Thanksgiving period as a “blip” of business; there is a crowd that must be catered to but then there is a dead period of approximately three weeks until the end-of-the-year holidays kick in. It creates its own business challenges for the tourist related businesses. This year the challenges are even greater.
Lovely weather and snowcapped mountains have made Mammoth a very desirable place to be in the past two weeks, although there were a couple of serious wind events. There is beautiful weather (but no snow) in the long range forecast. Decent sized crowds moved in-and-out through the whole period, but none were “crushing” by any means. The Ski Area has utilized the natural snow and implemented their early season snow making and access plan. This past weekend they had Chairs 17 and 4 open to utilize the Canyon Lodge parking lot and bridge into more skiable terrain. Covid restrictions have made for longer lift lines and loading times. But none of it appears to be holding anybody back from getting their runs in.
A spike in Covid cases in Mono County, minus the massive outbreak amongst the Marines in the north County, has the entire community at a level of incredible uncertainty as we move into December. The local Covid testing has ramped up and is estimated to be at around 60 per day. But the information generated also seems somewhat vague and the Marine numbers clearly skew the overall picture. The County officially moved into a new tier that further limits indoor restaurant seating and STR and hotel turnover and protocols. And there does seem to be some defiance. There was a small protest parade last weekend rebelling against lockdowns and masks. But others are getting more serious.
The Mammoth Lakes Restaurant Association issued a Statement of Concern to all of the local public officials. The statement makes it clear that most Mammoth restaurants and small businesses will not survive any further restrictive tiers. They spell out the inevitable closing of facilities and layoffs if any further restrictions are implemented. They argue that the uptick in cases is due to local residents traveling outside of the area and private gatherings, all which have nothing to do with their operations. They are pleading to implement a “safely stay open” policy in order to stay in business, keep people employed, and to serve our guests.
Meanwhile, there is no doubt that further lock downs in southern California are driving people to the high Sierra. Low inventory continues to thwart buyers driven by these dynamics but rentals may be crazier. Mammoth has always been a tight rental market but the demand for everything including seasonal (winter) rentals is through the roof. Renters are willing to pay near astronomical rental rates, especially for very desirable properties. If we thought last summer was crazy, this winter may be even crazier –– wind and weather permitting.
A recent Redfin News article “Demand For Second Homes Surges 100% Year Over Year In October” spells out the contrast of affluent Americans who can work from home (remote) and afford a second home to the balance of those suffering from business closures and unemployment. This demand is obviously increasing values in many resort areas. The article states that even as offices do reopen, the flexible remote work policies will continue to be offered. The article also states that many new second homes may in fact become primary residences. Mammoth is clearly not alone. Real estate news outlet Inman has dubbed 2020 as “The Year of The Second Home.”
The Mammoth Community Water District once again has nice rebates for replacement of items like old toilets, clothes washers and dish washers. The new replacements need to be Energy Star and water saving devices. As I walk through properties there are still plenty of old water inefficient toilets and appliances in Mammoth. This is an attractive program but when I get to page 2 of the application I see a hitch. Proof of purchase and installation is pretty easy. But one requirement is also having a receipt for the replaced/disposed item from the “transfer station” (Industrial Park or dump). This seems like an onerous bureaucratic requirement. The practicality of it is missed by somebody. Myself and others would be incentivized by the rebates except for this one requirement. Time is money for most, and tracking down a receipt for garbage/junk now makes the rebate uneconomic for many. Maybe it works if you are retired or unemployed.
There is a liquor license posting (ABC) in the window of the old Slocums property. Looks like the new owner (in escrow) intends to reopen a food and beverage facility in the iconic location. It is nice to see confidence in both the community and the industry.
My Real Estate Q&A “Marketing and Dispersed Thinking” that appeared in this weekend’s issue of The Sheet has already brought numerous comments to me from members of the public. This includes some people I know and others I have never met. Apparently the publisher had the issue on the street early on the Wednesday before Thanksgiving, so it got some early exposure. I appreciate people’s comments but I have suggested they forward their comments to the Town Council. The Council needs to hear from others on this topic. Most of them think I’m just some crack-pot.
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 it is in a gated community. I hope the odd roof line survives a big winter.
An upsloping lot on upper Forest Trail closed for $360,000. It will be expensive to build on but it does back to the infamous ski-back trail and is located within an easy walk to the Village. For the same dollars a buyer has some nice choices in the local vacant lot market, especially considering the added cost to develop on this lot. Maybe this segment of the market will start to move.
A top floor 2 bedroom / 2 bath unit in White Mountain Lodge finally closed for $675,000. It was the fourth time it was in escrow this year.
There were four mid-range single family closings ranging from $675,000 to $806,000 including two homes in Old Mammoth. The availability in this segment of the market is now gone.
Favorite New Listing For The Period!
Here’s a lesson in curable defects and incurable defects. This is great property. But many first-look buyers might not see it. This is a vintage 1989 Snowcreek IV townhome. It has had some updating but even this updating is now out of style. But talk about an incredible location on the Meadow. This is a 3 bedroom/ 3.5 bath townhome (2,475 sq ft) featuring a 2-car garage and forced air gas heating. The living area is on the ground floor (but with large vaulted ceilings) and it spills out into the Meadow and pond area. The floorplan is basically three master suites with two upstairs. The sale of the townhome includes a one-third interest in the two vacant lots behind the property to be preserved as open space. This is a fantastic opportunity to own a special property in Mammoth and remodel it to your own liking.
Listed at $1,150,000
Courtesy Mammoth Realty Group
Other Real Estate News
The National Association of Realtors® (NAR) has become very proactive about discrimination in 2020. Not that the Fair Housing and other anti-discrimination efforts haven’t played a large role in the past. But this year it has become an especially popular theme. The latest is the potential discrimination risk of “buyer interest letters” or “love letters” to sellers when presenting offers. These letters accompanying offers have become quite popular over the years.
Real estate related television shows have convinced many buyers that they are imperative. And some sellers expect them. Sometimes they can be the deciding factor for a seller to choose one buyer over another. They often include an introduction to the buyers including some “warm and fuzzy” information and often a photo or two.
These letters are not typically in common usage in the Mammoth real estate market. A statement of financial strength seems to be more compelling. Earlier this year I was in a dual agency role and the buyer included a letter of introduction. One part that stood out to me was that the husband had completed two combat tours in Iraq as a U.S. Marine. This was oddly at a time when anti-police and anti-military sentiment was rather high. Information like this could cut both ways with a seller. Thankfully, we never discussed it either way. It in no way impacted the transaction (which did successfully close).
But now NAR is warning the membership that they have legal risks when including these letters with purchase offers. “These letters can reveal information about a buyer (such as protected classes or characteristics) that should not be considered by the seller in choosing among competing offers.” The protected classes include the typical race, color, religion, sex, etc. and gender identity or expression, medical condition, military/veteran status, age, etc. and “any arbitrary determination.”
NAR is stating that “these considerations can inadvertently occur in the decision making process because of a person’s unconscious or implicit bias.” So what is NAR recommending to their brokers? Sellers don’t have to accept these letters but if they aren’t going to accept them from one party then they shouldn’t accept them from all prospective buyers. “Otherwise, unequal treatment of different buyers may itself be discriminatory.”
Ultimately, NAR is basically telling sellers that they should instruct their agent, in writing, not to present such letters or not to present offers that are accompanied by such letters. Best to avoid any risk of unconscious bias. Inevitably, the next step is this will become a boilerplate provision in both the standard listing agreements and purchase agreements. And shortly after this the era of buyer letters will quickly come to an end. It was fun while it lasted.
Thanks for reading! Stay healthy and sane!
If you know anyone interested in buying or selling real estate in the Mammoth region, please send them my way!