Council Springs For Sprung and Mammoth Enters “The Craziest Market Ever”
Market Summary – February 14 to February 28
The Mammoth Lakes MLS is reporting 30 real estate closings for the period ranging from a low of $173,500 to a high of $4,300,000. Of the 30 closings, 26 were financeable properties and 14 were financed closings. There were seven (7) sales over $1M including two condos and five single-family homes. The high sale at $4.3M was a cash purchase. There were four (4) more residential vacant lot closings. The 10-year Treasury yield climbed significantly again to 1.46%. Mortgage rates have now moved upward and are at their highest levels in months. Online mortgage lender Better.com recently reported that credit standards are expected to ease in the coming months so if you were rejected for a loan in the past 18 months there should be new opportunities. They are also expecting higher rates due to “stimulus talks, steady vaccine rollouts and signs of economic growth.” We’ll see.
Condominium Inventory
At the period’s end the condominium inventory is up seven (7) to 20. There is finally new selling and new listing action at the Westin Monache (what took so long?). There were 20 new condo listings brought to the market during the period and nine (9) have already gone to escrow. And I’m sure after this weekend there will be more. These include both of the new 2 bedroom listings at the Westin Monache priced in the upper $600,000 range (this market condition changed in the blink of an eye). There were a total of four (4) new Westin units brought to the market in the period (including three original owners). There are now only two (2) Westin units on the market, all with higher pricing.
Some of the new listings in Snowcreek 5, Snowflower and Aspen Creek are all priced around $900,000. They are nice units but this is a whole new price range for these projects and floorplans. We are truly in a new discovery phase of pricing. Two of the brand new 540 Old Mammoth Road units finally closed this last week and more are expected to close in the next period. There is a beautiful new resale unit at Creekhouse that came to the market in the last couple of days. It won’t last, there is now pent-up demand at Creekhouse. The least expensive condo on the market is $399,000.
At one point during the period a prospective purchaser asked me if there were “comps” (comparable sales) to support the asking price of the property we were looking at. I thought to myself “Comps? Comps? Forget comps.” This current market has gone beyond conforming to any recent sales data. We are now at a point in the market where it is simply what a buyer (it only takes one) is willing to pay. And forget appraisal contingencies. There are plenty of cash buyers. And regular financed buyers may have to come to the close of escrow with increased down payments. How long these market conditions last is yet to be seen. Some think it has only just begun.
Single-Family Home Inventory
The inventory of single-family homes is up one (1) to 15. There were three (3) new homes brought to the market. I was out showing homes in the $1M range this past week and I get the impression that the current buyer pool is rejecting these latest offerings, for now. One of the new listings is a home I had listed back in the late 1980s and early 1990s. It has been updated, but it took years to sell back then. It has less than desirable curb appeal and floorplan. We’ll see how long it takes to sell this time around. It may be telling.
Pending Transactions
The total number of properties in “pending” (under contract) in Mammoth Lakes is down 14 to 109 at period’s end. The market is simply starved for any quality, reasonably priced inventory. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down eight (8) to 142. But based on inquiries and market action, there remains strong buyer interest in all of the Eastern Sierra markets. This even includes places like Chalfant Valley where we have an upcoming reverse mortgage REO property and the phone is ringing about it. Word travels fast!
Market Updates and News
The Ski Week crowd was substantial but certainly not overwhelming. The Mountain conditions are good but not great (maybe for some). But nobody was or is complaining. They’re just glad to be here. The weather has been very nice but the Sierra needs more snow. The remains of the big snowstorm dump of a month ago is hanging around, and it was a windfall at this point. There is a snowy period in the long range forecast but we need a couple hundred inches in March and April.
It was a rather slow news cycle through the period. The Town Council did give final approval for the Ice Rink/MUF/CRC facility. The vote was 3-2. It would have been nice to have a consensus vote for something that will financially strap the Town for years to come and will displace expenditures throughout the rest of the community. The hockey crowd is ecstatic. It will be fascinating to see the public’s reaction once the structure is up – it is massive and much larger than the structure represented in the EIR. There was no substantive environmental review on this revised structure. Maybe they can sell advertising to Goodyear on the side of the structure to help cover some of the costs.
As of tomorrow March 1 the Town moves to more relaxed STR restrictions. The 70% occupancy standard will be gone but units still need to “cool” for 24 hours before cleaning and new occupancies. More and more spas and common area hot tubs are opening with some restrictions. The Covid positivity rate dipped through the period but rose slightly at the end. I curiously watch the data on an almost daily basis and I don’t find it to be very consistent. And Mono County’s Health Director Dr. Boo announced that he will be moving on in the next few months.
Various public officials and concerned citizens held an “Eastern Sierra Dispersed Camping Summit” to discuss ways of handling the anticipated upcoming onslaught of visitors this summer, and especially those who just want to camp or squat wherever they want in the National Forest. Last summer was a disaster and could have been potentially worse. Congestion, trash and poop are one thing but we were spared a significant fire event locally. It was agreed that various levels of education are needed, from billboards to signage to “boots on the ground.” There was discussion of prohibiting campfires entirely like other National Forests.
The group’s next meeting is March 25. In the meantime (we pray) the beaches, Disneyland, Magic Mountain and the like are all allowed to reopen. The Mammoth region would prefer not to be the main attraction.
The February issue of Real Estate magazine confirmed what we have experienced here in the Mammoth market the past nine months; “a jump in demand to ski resorts as investors flock to the mountains.” The trend may be even stronger in Europe. And notedly there is a greater emphasis on size and space rather than location (we sure have seen this in Mammoth). Another apparent trend; beyond recreational pursuits like skiing, cycling and hiking, new owners want to become integrated into all aspects of the community. One broker from the French Alps was quoted, “There has been a global change in buyer attitudes, mountain resorts are now seen a year-round locations, not just vacation properties. We expect demand to remain strong in 2021 as investors realize the lifestyle benefits of a residence with an abundance of privacy, space and fresh mountain air.”
The FAA confirmed late last week that they are planning the first commercial flights (United Airlines) into Bishop starting Dec. 15 of this year. It is still unknown whether any environmental groups will get in the way of this schedule. There are wetlands at the one end of the runway and the Owens River is nearby. The fence around the airport has been completed as well as the runway resurfacing. There are plans to bring modular units in as a temporary terminal. If these plans are thwarted, the United flights plan to return to Mammoth Airport. Due to Covid and lockdowns, Dec. 15, 2021 is the next scheduled commercial flights to the Eastern Sierra.
Noteworthy Sales
The sale of Lodges #1137 at $799,000. This 2 bedroom / 2.5 bath unit never really came to the market. I’m sure the seller thought it was good deal for him to sell at $100,000 more than the last sale. But a similar unit (with a slightly less desirable location) went to escrow at $880,000 during his escrow.
Horizons Four #192 closed for $465,000. This is a clean 1 bedroom + loft / 2 bath end unit overlooking Azimuth Drive. The traffic that goes by on the street below is a small negative to the property. I sold this property back in the early 1990s and my client listed the property with me in 2015. It sat on the market but eventually sold in November of 2016 for $211,000. It has sold one more time since then with no major modifications. And here we are in 2021.
Favorite New Listing for the Period
Mammoth Creek Condominiums is exactly how sounds. Mammoth Creek literally flows through the project. The project also shares a property line with Mammoth Creek Park. So the location is rather special. The project also has a beautiful pool and spa area and a well-cared for tennis court. Here’s a 2 bedroom + loft / 2.5 bath condo that has views up to Mammoth Crest. The fireplace has already been retrofitted to the new Town standards. The project is in excellent condition including new roofs and new windows featuring interior wood encasements and metal exteriors. This unit has a large storage attic that could be expanded or utilized differently. This unit is ready for new owners who want to make it their own. MC46
Listed at $649,000
Other Real Estate News
News items from Big Brother and real estate….
I was recently solicited by Zillow to take a survey about their rental services. I used Zillow to market a few rentals last summer for my clients so I am in their system. I found the survey questions quite interesting. What they are proposing is offering landlords (as part of their rental service) a small insurance policy that would cover up to $5,000 of missed rent and/or damages to the property. The cost of the policy would be only $30. The $30 could be paid by the tenant or whomever. They also questioned whether having such a policy in place could incentivize the landlord to waive all or part of the security deposit. I found this to be a fascinating concept and something that could have real value to landlords whether they waived the security deposit or not.
Zillow is certainly out to dominate all aspects of the real estate industry (eventually). They have recently started to charge a small fee for placing rental listings onto their site. But this insurance policy idea is one that could eventually make Zillow THE place to not only advertise rental listings but to search for rental listings. It seems like they may have to be the underwriter for this insurance, but they probably have the financial strength to do so. Or maybe they make it up by charging more for the original rental listing, which may be worth it. And what about doing the credit and background checks on the prospective tenants that may become their liability? Sounds like another profit center and data gathering scheme.
But Zillow is also trying to get into the mortgage business, it tripled this business last quarter. I can imagine this is a perfect opportunity to move the tenant/renter data into the mortgage side. Renters will be hounded to buy for the rest of their lives.
Speaking of how artificial intelligence (AI) and real estate are coming together, here are a couple of new angles. Many real estate agents have CRM (customer relationship management) databases. The newest software offerings being pitched to agents can incorporate their databases into massive other databases and can now alert the agent when one of the clients is probably ready to become a buyer or seller. These other databases can be a vast array of things like employment information, health and death records, credit conditions, and God only knows what else. Kind of creepy if you ask me. When you lose your job or file for divorce or some other live changing event happens, your friendly local Realtor will be calling to see if your need to make a move. FYI, I don’t have a CRM, I prefer to communicate through my newsletters and blog. You can opt in or out at your own discretion.
Another AI function is being used by commercial property owners to determine how much actual traffic a mall or tenant is getting. A software named Placer uses cell phone data to accurately monitor just how much traffic a particular “geo fenced” area is getting. Tenants can no longer complain that “traffic is down” to the landlord when traffic is actually up. The software service is rather expensive but is now the tool elite commercial brokers can offer to their clients. Laughingly, it will probably be a cheap iPhone app within a couple of years……Something else to think about, between your cell phone and your IKON Pass (with RFID), imagine how much data the Ski Area has on you?
…..And the “craziest market ever” was yesterday’s quote from the 40+ year builder, developer, subdivider here in Mammoth. He has built probably one-third of the structures in Mammoth, and that is what he thinks about the current market conditions. And this broker of 35 years in Mammoth will concur.
Thanks for reading! Please stay healthy.
If you know anyone interested in buying or selling real estate in the Mammoth region, please send them my way!