The Mammoth Lakes MLS is reporting 17 real estate closings for the period ranging from a low of $241,000 to a high of $3,700,000. Of the 17 closings, a total of 16 were financeable properties and 12 were financed closings. There were five (5) single family closings over $850,000. Another vacant residential lot closed in a neighborhood that in the past has been a difficult sell. All of the closings represent higher prices within their segment. This period last year there were only three (3) closings, obviously impacted by the lockdowns and incredible uncertainty. What a difference a year has made. The 10-year Treasury yield was up slightly to 1.632%. This time last year the 10-year was at .657%. Lending is not the “slam dunk” it was in the months past. Lenders and underwriters are clearly becoming more cautious. Loans within conforming rates with good down payments are certainly the easiest. Jumbo loans with leverage are being highly scrutinized. Buyers and agents seem to be very cautious about any property that fits or resembles condo hotel, unless the buyer has cash. Delivery of appraisals has become the new headache. But rates remain outstanding.
At the period’s end the condominium inventory is down six (6) to 40. So any large increase in inventory is thwarted for now. A potential increase can naturally happen in this resort market just before holiday weekends. The seller psychology is that volumes of buyers come on these weekends to look, and it is advantageous to have their property on the market. There were 12 new condo listings brought to the market during the period (again, fewer than last period) and five (5) have already gone to escrow. The two biggest concentrations of listings are at Juniper Springs Lodge (7) and the Westin Monache (5). There are only two listings in all of Snowcreek. Recent hot selling projects have been Mountainback and Courchevel, both in the Canyon Lodge area. This time last year there were 87 condos on the market (and it would have been a great time to buy, but who knew?).
Single-Family Home Inventory
The inventory of single-family homes is down four (4) to 14. Again, no large inventory increase ahead of the holiday weekend. There is still strong demand for homes priced slightly over $1M that have plenty of obsolescence. There are still six (6) homes listed under $1M and there are four (4) listed over $3.5M. This time last year there were 32 homes on the market.
The two of the four fourplex apartment buildings that were listed in the past few months have now gone to escrow. These two are the best of the bunch. The others may sell quickly now. The Main St. Promenade (formerly Outlet Mall) property on Main St. is on the market for $10,000,000 at a 6.1% cap rate.
The total number of properties in “pending” (under contract) in Mammoth Lakes is even at 93 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 17 to 152. The local market could be in a slight pause but it is the shoulder season. And again there is some apparent exhaustion in the market; from agents to inspectors. And buyer interest has waned due to the lack of inventory. This time last year the numbers were 32 and 58 respectively, but these were no doubt lockdown constrained.
Market Updates and News
Many local residents have enjoyed vacation time in recent weeks. It is that time of year. The ski conditions are deteriorating quickly but this is to be expected in a drought winter. Mammoth is obviously in better shape than other resorts. The US Ski and Snowboard team and development team have been here the past few weeks. But they have now moved on. There are fisherman in town and the RV parks and campgrounds in June Lake have been full almost all month. I know lots of second homeowners are planning on coming Memorial Day weekend. With some warmer weather summer is kicking into gear.
Mammoth has moved into “yellow” phase and the Town is doing its best to make it a great summer here. The hugely popular 4th of July parade is scheduled for Sunday the 4th. The Town Council also pledged financial assistance (loan with payback) to make Bluesapalooza happen August 5-8. They just need to finalize the venue lease. The Lakes basin is scheduled to open May 28 subject to crews making sure everything is safe. There will be a town hall meeting on May 25th to address dispersed camping and potential campfire restrictions, general public education, etc.. Following last summer’s experience, Mammoth is expecting massive summer crowds. But the State is far more open this year than last year and it may or may not actually happen. The Town’s marketing efforts have been cut back substantially and the lodging industry continues to promote higher rental rates and the slower turnover of rental units. We’ll see how it all plays out. At least some of Mammoth’s favorite events are back on the schedule.
Poking around town, the Ice Rink/CRC location at Mammoth Creek Park West is about the only place where there is any true major construction happening, yet. There is no sign of the promised “refresh” work beginning at the Westin Monache. The Limelight Hotel earthwork (digging a big hole) was purported to begin this summer. But there isn’t a survey stick to be found on the parcel. This would be a prerequisite for any work. There are no survey sticks in The Parcel either. Maybe they want to wait until it snows again in fall. The Mammoth Hotel redevelopment project appears stymied. There has been a piece of heavy equipment doing something on John Hooper’s property on Lakeview Blvd. adjacent to the Limelight property and the Canyon Ski & Racquet Condos. He intends to build townhomes similar to the 540 OMR project. A Doppelmayr (chairlifts) survey crew has been seen in town. There is no doubt that increasingly expensive construction materials, supply chain difficulties and labor shortages are impacting all of these projects. But the geothermal plant expansion is going full tilt.
With no real development to talk about, the short term rental (STR) business and industry trends continue to be the most important local real estate topic. See the “Other” discussion below. One little development I noticed, the Ski Area now thinks the ideal compliment to the “only going to be there for a couple of years” sprung structures at Eagle Base are steel shipping containers. LOL. Shipping containers seem to be in vogue these days. I wonder what the out-of-state IKON Pass holders think of tents and shipping containers as the architectural theme at Eagle Base? I remember in the mid-90s when the Intrawest people started to come to Mammoth. Many of the them referred to the then “Chair 15” area as the “Blackcomb of Mammoth”. Blackcomb (Whistler) has grand hotels and amenities. What happened?
The new Burger’s upstairs bar in the Village won’t be open of another couple of weeks but I got a tour last night. This is fantastic space with a large high-performance bar set-up. They are serious about cranking out drink volume. Plenty of other special features including extensive south facing glass with views to the Sherwin and attention to acoustics. With Slocums and Nevados permanently closed this may become the new hot bar. The original designer of the Village always emphasized that successful villages happen when the local residents and visitors mix. Because of the location, history and access this new facility is where the interaction will likely happen. The owners have made a large capital investment. All in a building that was slated to be torn down in the last real estate cycle.
The demand for medium term rentals (MTR) has apparently cooled. This was in high demand a year ago due to lockdowns. Many of the these MTR renters may have become new owners here in Mammoth or other locations. Others may have found their favorite rental and have their arrangements in place. But I suspect it will remain a component of the local rental market for years to come.
My brokerage is still actively engaged in the REO/foreclosure industry. There isn’t much activity these days (we currently have one reverse mortgage REO out in Chalfant Valley). But one really weird thing that came across our desk in the last couple of days; the industry asked us to evaluate The Parcel (?). Weird. I thought the Town paid cash? Maybe they refinanced to pay for the Ice Rink/CRC.
I had written a Real Estate Q&A “Mammoth Newbies” for the Memorial Day Weekend issue of The Sheet. The publisher called me Thursday and said he was “struggling” for content and wanted to run it this weekend. Oh the irony, can’t violate Mammoth’s 11th Commandment.
A nicely remodeled (kitchen, bath, decor) 1 bedroom / 1 bath at The Summit closed for $450,000. Optimal ski location and looking right at Eagle Express. Maybe this should have sold for more??
A very dated 2800 square foot home on lower Forest Trail closed for $1,098,000. This is a classic “if you ever wanted to sell, now is a great time!” property. This may be the story of 2021.
A Timbers townhome closed for $1,575,000. The seller did very little to the property while owning it. They closed escrow back in October of 2020 at $1,095,000. I hope they got some enjoyment out of the property the six months they owned it.
A small log cabin in Old Mammoth closed for over $600 per square foot. That was luxury home pricing just a couple months ago.
The sale of a small home on 35 acres off of Highway 167 that is north of Mono Lake for $575,000. Wow! This was obviously bid-up because it was originally listed for $499,000. This is a true “tell” in the market. In a normal market this would have sat for months with little interest. Especially at this price. Again, similar properties have taken years to sell. This is remote “dust bowl” country. This “off the grid” house is cute with some nice improvements.
Which leads me to this……….
Favorite New Listing for the Period
The historic Tioga Lodge Complex is one of the oldest existing improved properties in the eastern High Sierra. Located on the western shore of Mono Lake, the complex includes a restaurant and meeting room with commercial kitchen, 17 individual lodging units and three employee housing units. Located on ~23 acres of private land including lakeside property. The “meadow” area of the complex includes a running creek, gazebo, and bridge. Buildings have metal roofs and propane gas heating. Property is all zoned commercial so there are all sorts of possibilities. The Lodge has not operated the last two years due to owner’s health and Covid, but is in condition to operate within a short period. Spectacular panoramic views of Mono Lake. Immediate access to the lake from the property. Check out the video tour.
Listed at $999,000
Other Real Estate News
Airbnb continues to have profound influence on the STR industry as a whole and in Mammoth Lakes. The now publicly held company recently released their 2021 first quarter (Q1) financial report and with it is some fascinating information. And one glaring question that comes out of it all; the lodging service remains the darling of STR guests, but is it really the best service for STR hosts/owners? Their shareholder report clearly states that they need to recruit more hosts. But a growing number of owner/operators are clearly thinking the answer is “no.” Recruiting new hosts (and have scale to be profitable) may be their greatest challenge.
First, some hard numbers with corporate/real estate factoids of interest. The company lost $1.172 billion dollars in the quarter on $887 million in revenue. Revenue was up 5% year-over-year. The adjusted (magical) EBITDA number was only a loss of $59 million. One of the interesting underlying corporate expenses was that they spent $113 million buying themselves out of high-rise leases in the Bay Area. These expensive office leases included over 100,000 square feet of space that they never occupied and ultimately deemed they wouldn’t need. Covid, work-from-home, and remote working all changed this in a hurry. They also ditched another ~200,000 square feet that they had actually occupied. This buyout will certainly cut future expenses.
The company’s stock price has also fallen back down to its first day IPO price of around $135 per share. It had worked its way into the $220 range in mid-February…. Interestingly, Airbnb has now brought a new metric to the industry; GBV or gross booking value. It is different from revenue. Revenue is earned in the quarter. Gross booking is “booked” in the quarter but might (or might not) be revenue in another subsequent quarter. Bookings do get canceled. They sure did during the pandemic. Or when the town is full of smoke. Or when the skiing isn’t great. Or a million other variables that can make guests cancel. But Airbnb’s GBV is up 52% for the quarter. It is a “look good” number but certainly is no guarantee of revenue.
This big GBV number is why the CEO is saying the summer of 2021 will be the “travel rebound of the century.” And this is exactly what the industry is expecting. Again, it may or may not happen here in Mammoth compared to last summer. There will be significantly more open areas/attractions for recreation seekers this summer. But domestic travel within driving distance of the guest’s primary residence is expected to be enormous. Airbnb and VRBO (Expedia) are both warning guests that some popular areas will be sold out this summer. Also, polling is showing that the public considers private home rentals “safer” than hotels this summer due to less interaction with people. We’ll see how this is reflected in Airbnb’s Q2 and Q3 revenues. And here in Mammoth.
Another interesting Airbnb feature that came to light in the period is their “fee transparency.” Apparently in some markets the cleaning fee, service fee and bed taxes stack up to exceed the actual cost of the rental. Guests are beginning to question this. Supposedly it is a hot topic on social media (I wouldn’t know). But this fee transparency is displaying something that has been mis-understood in Mammoth for decades.
In the past (and pre-Airbnb) many Mammoth reservation companies charged at standard ~38% for management and “turn over” of STR units. It was rather all-encompassing and it was an easy and simple way to get to the division of monies between owners and lodging managers. Some of Mammoth remains in a similar arrangement. But some/many owners and prospective buyers balk at this number (or higher numbers). They believe it is excessive and unfair to the owner.
But the fee transparency numbers show that it probably isn’t. As we used to say in the reservation business, it “has lots of working parts.” Cleaning, new linens and towels, new supplies (the guests are more demanding in this area), etc., all cost money. Somebody has to organize and manage all of it. Even for very competent personnel it is a juggling act. In some markets, the cost of STR execution is exceeding the revenue to the host. It already happens at the Westin Monache. It is a push in the Village and Snowcreek. Locally, it is strong argument to raise lodging rates. All while Airbnb is seemingly driving them down.
One more interesting stat from the report; 55% of hosts are women, 58% of Superhosts are women.
I’ll be back in four weeks. Time to spend some days on the warm Pacific in pursuit of pelagics that want to play. The inevitable sharks are always ready. It has been a year of sharks for sure.
Thanks for reading! Please stay healthy.
** Closed sale data is compiled from in-house files and public records.