The most subdued holiday period in decades, new snow coming and IKON blackout over!
Market Summary – December 13 to January 3
This report is for the past three weeks. Not only is it nice to have a holiday respite, but the historic metrics show readership declines significantly within the holiday period, so….. The Mammoth Lakes MLS is reporting 34 real estate closings for the period ranging from a low of $235,000 to a high of $1,840,000. There was a small rush to get transactions closed for holiday and early January usage. Of the 34 closings, 31 were financeable properties and 20 were financed closings. There were 17 condo closings under $500,000. There were two (2) more vacant residential lot closings. There were five (5) Snowcreek closings. The 10-year Treasury yield ended the period just slightly up at .917% but mortgage rates remain at near record lows.
Condominium Inventory
At the period’s end the condominium inventory rose six (6) to 25. This still includes the seven (7) Westin Monache listings. There were 12 new condo listings brought to the market during the period and two (2) have already gone to escrow. The 2020 numbers are finalized with 441 condo closings. There were 387 condo closings in 2019. Pretty impressive numbers considering the market was dead for 3-4 months. Mammoth condos sold for an average of 98.7% of the original list price in 2020. It was 97.5% in 2019. Average sold price was up in 2020 to $558,000 over $525,000 in 2019. Median sold price was up to $475,000 over $450,000 in 2019. There were 34 condos selling for more than $1M in 2020. It was only 20 in 2019. There were 84 Snowcreek condos closed in 2020 compared to 67 in 2019.
Single-Family Inventory
The inventory of single-family homes is down one (1) to 16. There is one new listing slightly under the $1M mark. The 2020 residential numbers are impressive too. There were 127 single family homes closed in 2020 compared to 91 in 2019. They sold at 94.4% of list price in 2020 compared to 95.4% in 2019. Average closing price was up to $1,072,000 in 2020 compared to $924,000 in 2019. Median closing price was also up to $885,000 compared to $785,000 in 2019. There were 45 homes sold over $1M in 2020 compared to 27 in 2019. There were 11 homes sold over $2M in 2020 compared to only three (3) in 2019.
Pending Transactions
The total number of properties in “pending” (under contract) in Mammoth Lakes is down 21 to 77 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down 27 to 100. The holiday period and lack of inventory has clearly slowed market activity. But these numbers are still significantly higher than the past norms.
Market Updates and News
The lock-down holiday period has come and gone and the ramifications are likely to impact Mammoth for months or years to come. The loss of critical revenue for restaurants, retailers, STR owners and the related reservation/rental entities will no doubt put many into economic jeopardy. And the loss of prime-time bed tax revenue will impact the operations (and aspirations) of local government. How it will ultimately shake-out is hard to predict. Mammoth has always rewarded the survivors, and this time will be no different. And the obscure local trust funders and money launderers almost always survive.
There was a mixed crowd in town through the holiday period and many have cleared out in the past two days. The IKON Pass blackout probably kept some owners from coming but many expect them to show in the coming days and weeks now that the blackout is lifted. Or at least until MLK weekend. Besides second home owners, there was also a hint of rental shenanigans too. Owners and renters were working different ploys to work around the STR prohibition. There is demand and too much revenue at stake. It certainly wasn’t overwhelming, but with the IKON blackout over there will likely be more demand. There were and are plenty of RVs roaming around in the area. And even some campers. Mammoth is expecting a respectable snowstorm tomorrow (Monday) and that should only increase the demand.
Amongst the STR gambits were some scams too. Right before Christmas I had a gentleman enter my office in the late afternoon inquiring about clarification of a specific address here in Mammoth. He had (illegally) rented a condo off of Craigslist and couldn’t find the property based on the address the “owner” had provided him. I tried to help him but the specific address doesn’t exist. The description of the property is similar to those in the immediate area. He tried properties with the closest description with no luck. He later admitted he had been scammed. So much for a white Christmas.
For those who actually were able to go skiing and snowboarding, the conditions weren’t great but there was fun to be had. The Ski Area, as usual, made the best of marginal conditions. But revenue production at the Mountain has to be greatly compromised. At least they are open and operating. And there is some local dissent about why they can be open and others can’t. Meanwhile the local Restaurant and Lodging Associations continue to press the local public officials to petition the State for exceptions to the Stay Home orders and lockdowns. So far to no avail. They will keep trying. Some restaurants and food service operations have been successful at expanding their to-go business, but nothing like having massive crowds in town and dining rooms open.
I was involved in a couple of escrow closings this past week and I have to say the escrow officers did an amazing job overcoming some ridiculous problems (ones they didn’t create). They have been swamped with business the past seven months and proved to be at the top of their game. One very interesting problem; I was representing the seller on a cash/quick close transaction. The seller had refinanced a couple of months back through Quicken Loans. The promissory note and deed of trust had yet to be recorded with Mono County. It did not appear on the preliminary title report. The only reason the escrow officer knew the loan existed is because of the seller’s answers to the transaction questionnaire. This could be an interesting set-up for fraud if some sellers find out it takes certain lenders two-plus months to record the mortgages at the County recorder. A cash-out refi could make this even tastier for a scammer.
I’ve been asked about predictions for the Mammoth market for 2021. Good luck. My only prediction is that it may be crazier than 2020. And I plan to be here. I did have a Mammoth Real Estate Q&A in The Sheet over the holiday. There is a strong argument that Mammoth real estate has been undervalued for a long time. But real estate values appear to be increasing in markets all over the country. Locally, the STR prohibition may push more condos into the inventory. But MTR (??, you have to read the column) may save them. Time will tell.
Noteworthy Sales
Two 1-bedroom condo hotel sales at Eagle Base are interesting. Both have good locations and rather equal qualities. The one at Juniper Springs Lodge closed for $377,500 and had been on the market 458 days. The one at Sunstone closed for $440,000 and had been on the market 28 days (including the escrow period).
Two vacant lot sales at $307,000 and $425,000. Both will be very expensive to build on due to topography. One has an amazing panoramic view and previously had a structure that was destroyed by fire.
A modest home on Holiday Way closed for $1,125,000. This wasn’t on the market very long, this time….This is a great example of how expedient the residential market is. This home had been on-and-off the market in the past few years. It is a nice home but overlooks a busy street. In this market it sold quick.
Favorite New Listing for the Period
This was listed right before the beginning of the last period but is worth highlighting. This is an oversized, flat and sunny corner lot in the Majestic Pines neighborhood between Eagle Base and the Village. Vacant residential lots are becoming increasingly scarce in Mammoth (“they aren’t making any more”). The size is an important bonus because “site coverage” is a limiting factor in Mammoth; a large home with a large garage equals a big footprint and not all lots can accommodate this type of design. And many lot buyers grossly underestimate the cost of extra foundation work (concrete is locally up to $175/yard). The foundation alone for an up sloping or down sloping lot can easily go into six figures. And then there is no real yard to utilize. This is an ideal lot to build a Mammoth dream home in a quiet area of the resort corridor.
Listed at $499,000
Other Real Estate News
After becoming a public company just weeks ago, Airbnb’s stock price remains in the $140 per share range with a total market capitalization of around $90 billion dollars. Simply amazing. Is this a harbinger of the future of the STR business around the world? 2020 was an exhausting year for Airbnb and the STR business. But it has all survived. The data crunchers at AirDNA who analyze Airbnb’s 10 million properties recently came out with their 2021 Trends Report for the coming year and beyond. And it should all bode well for Mammoth and the local STR business, that is if we can get past the government shut downs. The trends….
- Getting Off The Beaten Path”…Airbnb’s latest slogan is “Go Near”. Major cities are out and rural small towns are in and 61% of families plan to visit outdoorsy destinations over urban ones and 59% say they plan to drive rather than fly on their next trip. Rural revenue is expected to be up over 20% in 2021 (assuming hosts react accordingly to the demand).
- “Unique stays” are increasingly popular but staying in a yurt or farmhouse isn’t for everybody. Larger properties that are fully equipped are projected to be the best performers in 2021. The more “single-family” home-like the better.
- The demand for “Flexcations” and longer stays has doubled and is expected to grow even more (see the MTR discussion in my Q&A column). The Trends report even states that MTR may save STR. The work-from-home (WFH) trend will only increase this demand. Hosts need to adjust to this demand and subsequent pricing.
- Cleanliness is a bigger priority than ever before. Airbnb enacted the Enhanced Cleaning Initiative and cracked down on inadequate hosts. So far it has been a success. Hotel-like cleaning standards are now the norm and are a key to the success of each and every host –– it will “drive occupancy.”
- Seasonality patterns are changing. AirDNA isn’t sure this is a permanent trend but it certainly was in 2020. Guess were traveling to destinations in “off season” and hosts need to be aware of this new potential demand to maximize revenue. If not for smoke and forest closures, this past fall may have seen record occupancies in Mammoth.
- Hotels continue to lose ground. Lobbies and elevators are out (maybe this is why the Westin units remain unsold?). The Covid pandemic boosted the popularity of independent STRs from 10% of total lodging revenues to over 25% in 2020. AirDNA projects that STRs will become the primary lodging choice in 2021. Future condo hotel development may be dead in Mammoth for a long time. What a difference a year makes.
- Average daily rates (ADR) remained strong and actually grew in most markets. And in the last four months of 2020 the rates for all sized units grew substantially. (See the chart at the top.)
- The STR business is riding a continued wave of professionalism. The majority of Airbnb units and revenue share is still dominated by hosts with fewer than five units. But this too is changing. Large-scale owners are expected to move aggressively into the STR market.
- Supply of STRs is decreasing in many marketplaces. The global supply of STRs plateaued in 2020. The pandemic caused many operators to close their doors and/or sell their properties. AirDNA ponders whether some markets were over supplied. But fewer hosts means less competition. I wish I had data on how many of the 441 Mammoth condos that sold in 2020 were increasing or decreasing the STR pool here. As I look back on the transactions I was involved with, it was clearly a decrease. I believe this was the overall trend locally.
Thanks for reading! Happy New Year! Please stay healthy.
If you know anyone interested in buying or selling real estate in the Mammoth region, please send them my way!