The Forest Re-Opens But Mammoth Gets Smoked Out, Then Blown Out!
Market Summary – September 5 to September 19
The Mammoth Lakes MLS is reporting 27 real estate closings for the period ranging from a low of $319,500 to a high of $2,395,000. Of the 27 closings, all 27 were financeable properties and 23 were financed closings. A total of 13 closings were condos selling under $600,000. More sign of normalcy in the market. There were three (3) closings at Juniper Springs Lodge and all three are being reported as financed closings. Clearly the lenders have figured out how to come up with reasonable financing for condo hotel units. This is good news.
The 10-year Treasury yield is up slightly again to 1.37%. Mortgage rates moved up slightly but not significantly. The Federal government home finance related agencies suspended their restrictions that they enacted back in January on second homes and investment properties. Theoretically this should help lenders to continue lending in the Mammoth region. This could signal they believe that rising values in both the second home and investment markets are sustainable. Or maybe they are recognizing clear inflation that isn’t likely to go away.
At the period’s end the condominium inventory is down one (1) to 29. There were 13 new condo listings brought to the market in the period and five (5) are already in escrow. The only real remaining concentrations of listed units are five (5) at the Westin Monache and three (3) at Juniper Springs Lodge.
Single-Family Home Inventory
The inventory of single-family homes is up four (4) to 24. There are six (6) homes listed under $1M. And again, lots of potential buyers out there looking but frustrated by the lack of inventory. I marketed a multi-unit (fourplex) apartment building this past week and the buyer response was impressive. Realistically I could probably sell 6-8 of these buildings right now. And without all of the government interference on rents and tenant protections, there might be dozens of buyers. I had numerous discussions with agents and potential buyers and no one has a clear idea of how high the 2 bedroom apartment rents might go here in Mammoth. A few hundred workforce housing units at The Parcel may change the dynamics, but probably not. Rents seldom go backwards. A recent national statistic stated that rents are up 9.2% across the nation. I’m thinking at least 15% here in Mammoth in the past 15 months.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down six (6) to 90 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down five (5) to 140.
Market Updates and News
Mammoth has been quiet the past two weeks. Even with the forest closed it was enjoyable, especially the extended period of relatively clear air. But then serious smoke and ash from a fire west of Mt. Whitney rolled in the past few days. A small cold front this weekend blew it all away. Today, Sunday, was gloriously clear, especially after the previous days. The forest reopened on Thursday. AiDNA was reporting 30% occupancy for the weekend in the units they report. That seemed a stretch. Local rental entities confirmed it was lower. Maybe there were lots of last minute cancellations.
The Mammoth Lakes Film Festival 2021 was this weekend and seemed reasonably well attended. They might be the best-dressed crowd that comes to Mammoth. They were probably glad to be inside for the most part. Between fires, smoke and the massive rabbitbrush bloom (all that “pretty” yellow this time of year), we have good reason to pray for snow. Summer is over.
The Town front was quiet too but the tree cutting has begun at The Parcel. It looks like a perfect set-up for them to try to pour foundations and frame structures in the winter months. All that does is increase costs and degrade the quality of the finished product. Even John Hooper tries to avoid doing it anymore. Forty-plus years of experience will teach you something. Hooper’s crews are framing like mad on Lakeview Blvd. and other residential sites. Time to get construction moving towards “buttoned-up” for the winter.
The Town did recently announce that the summer of 2021 was the best summer ever for TOT (bed tax) remittance. And of course everyone took a victory lap with the marketing wonks for their impressive success. It didn’t seem like an overly crowded summer, not compared to 2020 or any of the big summers of the past five years. Maybe all of the discussion a year ago about quality-versus-quantity actually played out.
The really laughable thing is their complete lack of recognition of the expansion of quality bed-base available to our guests. The STR movement of the past few years and especially the past 15 months has been impressive. So many new, excited and knowledgeable homeowners willing to make substantial upgrades to their properties and offer first-rate guest experiences. And what about the local workers and management, the service component, that has been on a complete roller coaster the past 18 months (and especially considering some of them are living in the forest and cleaning rooms all day long)? Our leadership appears completely oblivious to how TOT is really generated. Marketing is the “hat”, the STR ownership and mechanics is the “cattle”. I congratulate the owners and workers. I work with them all day long, and if the numbers are correct, they hit a grand-slam this summer.
And all of this is even more important because it is obvious that the economic conditions are all wrong for any sort of hotel development. I predicted this some two years ago but the Limelight and others gave us a glimmer of hope. The construction estimates have gone parabolic. The industry as a whole has been seriously damaged. And even if it was built, who would staff it? So the Mammoth STR business is alive and well. And quality not quantity appears to be a worthwhile goal.
Meanwhile the “start-up” Pacaso luxury home co-ownership business has recently raised two things; a new round of capital and the ire of luxury resort area homeowners who simply don’t like them as neighbors. It hasn’t come to Mammoth yet (as far as I know) but it appears bound to. Neighbors of these new co-ownership properties in places like Newport Beach and Napa Valley are getting down right nasty with their new neighbors. One quote from a neighbor, “You’re a transient vacation occupant. You’re not joining local groups, you’re not sending your kids to school. You’re not a member of the community. You are coming here for a two-week vacation and then leaving.”….With Mammoth’s long standing and proven rejection of transient occupancy in single-family zoned neighborhoods, Pacaso coming to Mammoth may become a future community drama. Which neighborhood will they choose first? Maybe they will have the foresight to choose one of the few Resort-zoned residential neighborhoods where STR is allowed. But that would be too easy.
A smattering of STR and Airbnb type information came across my desk in the past couple of weeks and the one that stood out; the newest important amenity is electric vehicle (EV) charging capability. The two resort areas with the highest percentage of EV charging Airbnb units are Stowe, VT and Bend, OR. But the South Bay area of Los Angeles and Coastal Orange County are also in the top 10. This is telling about future demand in Mammoth. It will become an important STR amenity.
And the Ski Area was doing serious maintenance on one of the “Sprung” structures at Eagle Base this week including structural work and fabric panel replacement. It tells me the “60-year life” of these structures is dubious and that the low maintenance “sell” is questionable. Especially in the Mammoth environment.
A Tamarack condo closed for $567,000. These units are all the same floorplan; 2 bedrooms + loft with a 2 car garage. They are obviously popular with local residents. I had to go back to 2004 to find a closing from that era. It was $405,000. The older condos from the 1970s continue to perform at a historically high level in the Mammoth market.
The 2 bedroom / 2 bath Aspen Creek #211 closed for $440,000. It was bid-up from the original asking price. This property is facing approximately $60,000 in special assessments in the next four years for roofs, siding, windows and more. Probably still a good buy.
The high sale of the period ($2,395,000) was in the Starwood residential subdivision along the Sierra Star golf course. The Starwood homes have performed well in the recent months. It is a luxury neighborhood in the middle of town.
Snowcreek #808 closed for $995,000. This is a late-model 2 bedroom / 2 bath townhome in the Fairway Homes (phase 5). This unit is beautifully upgraded and backs to Forest Service land and open space. Snowcreek continues to perform at a high level.
Favorite New Listing for the Period
Creekside settings in Mammoth are special. Creekside settings with lots of open space, views and privacy are even more special. These settings are what make many of the Meadow units in Snowcreek 1, 2, 3 and 4 so special. They command premium pricing and deservedly so. Here is a 2 bedroom / 2 bath “flat” corner unit right on the open space with a beautiful long stretch of running creek right out in front. This is Snowcreek Phase IV. The BBQ patio spills right out of the living room into nature. Southern views to the Sherwins. This property is in great condition and ready to use and ready to rent. Forced air gas heating and a gas fireplace (no fireplace hassles!). Check out the video tour.
Listed at $739,999
Other Real Estate News
In the news this week; Two resort areas are proposing to take radical new steps to cure their workforce (affordable) housing crunches. The mountain resort community of Breckenridge in Colorado is working through legislation
A couple of readers commented and asked me about “broker supervision” from my last newsletter. They were unfamiliar with the concept. I have a feeling many in the business are unfamiliar too. But maybe I’m just too old school.
The real estate industry in California has been tightly structured for decades and regulated by the CA Department of Real Estate (DRE). The laws governing real estate brokers and agents hasn’t changed much over the years. Every active brokerage whether it is one person or hundreds of licensees requires a “designated broker”. Often this broker is actually a corporate officer broker. This position requires a real estate broker license as opposed to a salesperson license. A broker license is achieved by both experience and additional study and testing.
A basic salesperson license (agent) must be placed under the broker license of the designated broker of the company. This designated broker is responsible for supervising the salespersons. And technically the designated broker is responsible for supervising any other licensed brokers (associate brokers) in the company. But this liability is a bit of a gray area. Ultimately the company and the designated broker are responsible for the activities of all licensees under the umbrella.
From the DRE; “A broker shall exercise reasonable supervision over the activities of his or her salespersons. Reasonable supervision includes, as appropriate, the establishment of policies, rules, procedures and systems to review, oversee, inspect and manage:
(a) Transactions requiring a real estate license.
(b) Documents which may have a material effect upon the rights or obligations of a party to the transaction.
(c) Filing, storage and maintenance of such documents.
(d) The handling of trust funds.
(e) Advertising of any service for which a license is required.
(f) Familiarizing salespersons with the requirements of federal and state laws relating to the prohibition of discrimination.
(g) Regular and consistent reports of licensed activities of salespersons.
The form and extent of such policies, rules, procedures and systems shall take into consideration the number of salespersons employed and the number and location of branch offices.”
My concern from the last newsletter was that a young agent had presented me with an offer and a buyer “love letter”. These love letters have recently become taboo as a source of potential discrimination. It has been a hot topic in the industry pipeline. Obviously his supervising broker has not covered this matter. But all you have to do is read some of my recent “dysfunction” discussion and it might become obvious why. Over the years I can assure you that the Mammoth real estate industry has not been great on broker supervision and training. I sure tried over the years. And maybe the rejection of my attempts by now former associates is why I don’t have a large brokerage any more. Many Mammoth agents simply don’t want to be supervised or trained.
I would say that Mammoth is different from most of SoCal in respects to broker supervision and training. The large brokerages down south often have sales managers who are constantly overseeing the agents. From what I can see they have constant training programs available and have frequent meetings to discuss issues like love letters being potential grounds for discrimination.
And ironically, one long-standing large brokerage in Mammoth has utilized a revolving door of “rent-a-broker” designated brokers for decades (and still do). These rent-a-brokers, several who have also worked under my license at one time or another, were just figureheads for the DRE’s sake. They had no financial or liability interest in the business. The long standing owner of the brokerage never wanted a broker’s license. Talk about dysfunctional.
Thanks for reading! Please stay healthy.
** Closed sale data is compiled from in-house files and public records.