Light Snowstorms And Fall Colors Make For A Splendid Period In Mammoth!
Market Summary – October 3 to October 17
Single-Family Home Inventory
The total number of properties in “pending” (under contract) in Mammoth Lakes is even at 94 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is also even at 143. There are lots of buyers looking including several 1031 tax deferred exchange buyers in my sphere who have “clocks ticking”. The local real estate market and all of its participants are increasingly showing signs of exhaustion. It has been a crazy past 16 months. The questions about a “market peak” are increasing. But buyers continue to push and sellers continue to be interested in selling, especially at these current prices. If there was more inventory there would be more sales. And everybody now has “inflation” on their minds. Calculating “replacement costs” for properties will be an interesting exercise in the future.
Market Updates and News
Favorite New Listing for the Period
Other Real Estate News
I continue to be fascinated by the “movement” of the past 16 months. The level of real estate activity, especially in the higher-end or “luxury” segment of the market, has been at incredible levels that Mammoth has never seen before. A recent article at the real estate website Inman focused on the “16 luxury buying and selling trends you can’t ignore”. The parallels of the article to the recent Mammoth market activity are spot on. I can’t help expounding on them in light of the specifics to the Mammoth market. Here are some of the highlights.
From the Inman article;
What do your luxury buyers want?
1. Buying for space or privacy
“Get out — way out. If buyers had to quarantine, they wanted to go where they had space, and lots of it. Ranches, self-containing compounds and estates were high on the priority list. This trend is still continuing as buyers are looking for a comfortable place to be able to spread out and live, work and play as well as safely be able to host family and friends amidst the backdrop of COVID-19.”
• The immediate post-lockdown demand trend in Mammoth was large homes and townhomes with plenty of space. Condo hotel and high density condo projects lagged (but sales activity has recently increased). But Mammoth as whole is all about open space — “Small Town, Big Playground”
2. Views, views, views
“If they had to be on lockdown or quarantined after getting exposed to COVID-19, luxury buyers didn’t want to feel confined to four walls of a property. They wanted to have a view — something to take their minds off the stress and focus their thoughts elsewhere in an inspiring environment. Properties with views of water, mountains, valleys, golf courses became in high demand.”
• Maybe this is why Mammoth has been such an extraordinarily hot market. Mammoth real estate demand has always emphasized views and there is a diversity of incredible views to capture. Views and special open space settings have brought premium pricing in the past 16 months.
3. Turnkey properties
“Today’s luxury buyers want it all, and they don’t want to do any work. Well, they might because they can, but they don’t want to buy something that they can’t move into and have immediate use of without having to tackle a major redo.
With all of the uncertainty surrounding COVID-19 and various contractors coming in-and-out of a home during a renovation, not to mention delays in the supply chain causing major disruptions with building materials and appliances, buying a project is not the main priority in the luxury space today, unless the buyer is an investor.
A large-scale renovation could take several months and require a ton of carrying costs. Today’s luxury buyers are drawn to turnkey properties and move-in ready properties.
Seasoned luxury property owners have likely gone through many renovations throughout their lives, and they just want to spend their time enjoying the property without it being under construction. Younger luxury buyers are even more attuned to instant gratification, so if the property is well-appointed, they’ll gladly buy it with the furniture if they can.”
•Bingo. This is Mammoth in the past 16 months. Turnkey properties have brought premium pricing in recent years but this demand accelerated post lockdown. For many of the reasons stated. Conversely, many properties sold in “need work” state may have been good buys. Especially if they had special #1 and #2 features.
4. Extended living arrangements
“Buying a home that can aptly accommodate family being able to stay for an extended period of time — or perhaps even live there permanently — is also important in the luxury space.
Casitas, guest houses and attached or detached apartments on the property are also important to today’s luxury buyers. In short, buyers today expect their luxury homes to have enough space for guests, even if they don’t host people that often.”
•This is the simple explanation for the recent demand for larger properties in Mammoth. Also, the new, strong demand for multifamily capable STR properties. It is a growing travel trend.
5. Health, wellness, green and clean
“This trend has been written about many times since the onset of the pandemic, but it bears repeating. Buyers are focused on properties and communities that offer amenities related to health and wellness……”
• Nothing new here. This has always been a large part of Mammoth’s appeal.
“Today’s luxury buyers are all about technology. They are expecting their homes to be tech-savvy to fit their lifestyle. Think: electronic vehicle charging, home automation and the ability to have multiple TV screens in one room. Sophisticated home-office setups equipped for Zoom meetings are a must-have, especially if they’re distanced from the hustle and bustle of the household..…”
• In the past decade Mammoth has gone through a digital renaissance. The Digital 395 project brought powerful broadband to the region. Subsequent hardware investment (by Suddenlink) in Mammoth Lakes specific has made Mammoth a truly viable work-from-home location. The local Internet service providers are a pain-in-the-ass to deal with, but once your service is up and operating the bandwidth is fantastic for doing business.
What do your luxury sellers want?
When it comes to selling, there are also several luxury trends that have emerged over the last year.
1. Cashing out
“Today’s sellers are sitting on some serious equity. Many chose to give up their long-time property to cash out and do something different. Maybe it was just too large or required too much upkeep and maintenance. With their families grown and on their own, many luxury owners are taking advantage of optimal market conditions and low inventory. They usually have other properties they can go to while they figure out their next move.”
• Perfect description of Mammoth. Additionally, many of the recent Mammoth real estate sellers were buyers from the 2003-07 era. The upswing in values finally made them “above water” on values. This psychology alone turned many owners into sellers. Nobody wants to admit to a loss.
2. Desire to explore
“Many luxury buyers are selling their properties to allow themselves to become more flexible and mobile, particularly younger buyers who aren’t tied to a specific area.
They may want to travel or set out to have unique life experiences instead of being tied down to a property that requires a ton of maintenance and overhaul.”
• A key factor to the “movement”. Many Mammoth buyers are finding our region as the new exploration of their lives. And many Mammoth sellers are heading to new locations for exploration including places like Idaho, Wyoming and Montana.
3. Buying multiple properties
“Speaking of exploring, luxury sellers may opt to buy a couple of properties after selling their large one, homes that are a bit more manageable and turnkey in multiple locations.
The love to have real estate that allows them to transition between beach, mountains, desert or a lake or river. They may seek out lesser-known areas away from the crowds of more popular destinations…..”
• I have talked about this trend; the increasing number of people I meet who see their future just like this, including owning STR properties in multiple locations in diverse areas.
4. Moving closer to family
“After being isolated from loved ones over the last year, many luxury sellers are choosing to sell their homes to be closer to family. They’re trying to figure out a place to live where their adult children and grandchildren are based…..”
• Many of the seller’s I have represented in the past 16 months are in this category. It is their children who have moved away from SoCal.
5. Political and tax-related moves
“After years of living in high-cost, high-tax areas, some luxury owners are opting to sell and leave areas they’ve lived in for along time to better align themselves geographically with a location they feel that matches their beliefs and political ideology.…”
• The California ambivalence. I have clients of the past 16 months that can’t wait to leave, and others that will never leave, no matter what their political ideology.