Mammoth Real Estate Sales Report – October 3, 2021

Smoked Filters In-and-Out Of Mammoth And Fall Tourism Remains Healthy!

Market Summary – September 19  to October 3

This is a somewhat abbreviated report. Hopefully by the time this newsletter drops I will be off the coast of southern Baja. The Mammoth Lakes MLS is reporting 18 real estate closings for the period ranging from a low of $299,000 to a high of $3,235,000. Of the 18 closings, 17 were financeable properties and 15 were financed closings. The closings include nine (9) condos selling under $600,000. There were two (2) Snowcreek Phase II 2 bedroom + loft closings right at $900,000. There were four (4) residential closings over $1.2 million.
The 10-year Treasury yield has moved up significantly to the 1.5% range and probably beyond. Mortgage rates have moved up too. Mixed noise from the Federal Reserve appears to be the driver of the bond market jitters. I have buyers who locked in rates in the past few weeks and are glad they did. Where do we go from here?    


Condominium Inventory

At the period’s end the condominium inventory is down nine (9) to 20. There were nine (9) new condo listings brought to the market in the period and four (4) are already in escrow. There are “anticipation of winter” buyers looking in this autumn market but inventory is declining not rising. The least expensive condo in the market is $379,000 (Westin Studio). There are only nine (9) condos listed under $635,000. I can only recall one brief period around 2004 with so little inventory and especially in the lower end of the market.


Single-Family Home Inventory

The inventory of single-family homes is down three (3) to 21. There were three (3) new homes brought to the market in the period. Median price for residential property is $1,222,000. Average days-on-market is 83 days.


Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is up four (4) to 94 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up three (3) to 143. I’ll sound like a broken record; these “under contract” numbers could probably be double if there was an adequate amount of quality inventory in the market. I communicate with frustrated buyers on a daily basis. And there are dozens and dozens of frustrated buyers I have communicated with in the past 16 months who have simply given up. 

Market Updates and News

Mammoth has experienced pleasant weather for this time of year except for smokey conditions that have moved in and out. The past few days have been very nice. Film festivals, yoga (not yogurt) festivals, fall fisherman, plenty of cyclists, “geo-tourists”, second homeowners preparing for winter, and general tourism have kept a decent crowd of people roaming around the region. The smoke has curtailed rigorous activity on some days but when the air is clear it is time to get out and enjoy. Otherwise most people seem content to stroll around town and walk their dogs. When the smoke does clear it is obvious that the eastern High Sierra is experiencing a “slow turn” of fall colors. Based on the weather forecast, the changing aspens and other foliage should create a spectacular visual in the next couple of weeks. 
Future government legislation and intervention in real estate and related taxation is increasingly unknown and is beginning to create higher levels of uncertainty. It appears that industry lobbyists (namely the National Association of Realtors®) are keeping the most extreme recommendations from proceeding. This includes proposed 1031 tax-deferred exchange limits and stepped-up basis rules. On the Federal front there are likely to be proposals for higher individual and corporate tax rates. 
On the State front, the Governor recently signed some “up-zoning” bills designed to help alleviate the State’s housing crises. There are more unknowns at this time. Basically, these bills allow cities and counties the ability to allow property owners to place more density on their properties, even properties with existing structures. (Allowing the Town of Mammoth Lakes to “up-zone” properties as part of the workforce housing solution is a scary proposition in light of snow removal and snow storage considerations, but I digress.)
The ultimate effects of this new legislation are still far from known in Mammoth. I can see all sorts creative ideas going forward; the large Bluffs lots (~20,000 sq ft) could be opportunities for a luxury home and a duplex (your neighbors will love you), there could be more density in places like the Sierra Valley Sites (aka “The Ghetto”), and potential workforce housing units built on commercial sites, etc.. Many condo projects could potentially add housing units to their existing projects. Or maybe VONS wants to build a couple of apartment buildings on the north side of their parking lot. The views and solar aspect would be excellent. The NIMBYs will certainly come out in force when these proposals come forward.
Ultimately, average-to-big winters are increasingly going to be massive snow hauling events at substantial expense to property owners. Maybe I should buy a dump truck for my retirement years. Or two or three. But who is going to drive them??
T-Mobile recently made a $50,0000 donation towards a new dog park in Mammoth Lakes. T-Mobile is in the process of identifying rural communities where their employees may/will want to live and work in the future. This trend of younger generation remote-workers moving to Mammoth is already happening (I have two in escrow right now). They have solid non-tourist or service related incomes and most are earning well above the average worker’s wage in Mammoth.  The “feel good” dog park donation is nice. But what they are really saying is that when their employees start moving into the region they want to already have a good name. Their employees will further displace the local residents who are vital to the Mammoth hospitality, service and health care industries. Maybe we can have a small tent city designed into the new dog park? Or maybe we need a new tent city at The Parcel now that most of the tree cutting is completed?
There is more indication of increasing MTR (medium term rental) demand; a 2 bedroom condo I’m involved with received a rental for a two month period between now and December (notoriously slow tourism) for over $10,000. Great money for an STR owner in down-time if you can get it.  
In the past two weeks I’ve seen several cars with “Just Married” painted on the rear windows. Mammoth remains a popular “destination wedding” location. Maybe the Town should be figuring out how to further capitalize on this? A prime venue? The Ski Area planners always envisioned that the hotel and lake in the center of Sierra Star would be a prime wedding/special events location. But this won’t happen in our lifetimes. Maybe the marketing department has some ideas? Weddings are big business. Ask Convict Lake Resort.
Vail Resorts reported last week that they lost $141 million in their fiscal fourth quarter ending July 31. The crazy Covid lockdowns in Australia during the period didn’t help. The good news is their revenues were up $77 million from the same period last year. The company still has an amazing $1.2 billion in cash on hand. Hopefully for Mammoth, the Alterra Mountain Company is is an equal financial position. Or at least will be once they go public.  
When I started in the real estate business there was no Internet, no email, no listings online (IDX). We delivered purchase offers to the listing agent’s desk. Sometimes we used “intent” offers made through a Western Union telegram (really dating myself here). With all of this technology today I find many agents getting lazy(ier). One of my pet peeves is the growing overuse of texting. I know it is all the rage and can make certain things more efficient. But now I am observing agents texting critical documents to their clients and other agents. I think this is a huge mistake. Are the documents being carefully read? Are they being filed properly? I see more liability issues for brokers in the future. I currently have a $1M+ transaction going with another agent and all I get are nearly incoherent text communications from her. Crazy.

Noteworthy Sales

An upgraded 2 bedroom / 2 bath in Courchevel closed for $595,000. The is on the upper row which is closest to Canyon Lodge and the newer pool/spa area. There have been recent closings of similar units close to and above $700,000. Weird.
A nice 1 bedroom / 1 bath at The Summit (and I had spoken with the sellers a number of times over the years) sold for $460,000. It had been listed at $449,000. Seriously, due to the condition of the property, the view and solar aspect, and the proximity to Eagle Base, this property could have been listed at $495,000. “Leaving money on the table” continues to be a challenge for sellers in the current market.
The luxury Starwood home that closed during the period for $3,235,000 was a foreclosure (REO) my company handled in 2009. It closed for $1.9M back then. It probably decreased in value in the 2010-2014 timeframe. It was listed for $3.7M this time round. I recall doing a visual inspection of the property back in 2009 (it had never been occupied) and I could not find one imperfection.
A Studio + loft /2 bath at Mammoth View Villas closed for $463,000. It was originally listed at $429,000. This is some strong action on a marginal, small unit with a Village proximity location.


Favorite New Listing for the Period

Classic 1980s era 2 bedroom / 2 bath townhome located in the popular MeadowRidge project. Located on the inner circle of the project with immediate access to the park-like setting adjacent to the pool and spa. This is just two shuttle stops down from Eagle Base – or walk in the morning to warm-up! Original condition. This can be a light remodel project or something more serious. The HOA offers the owners the opportunity to make gas heating upgrades, exterior storage upgrades, and the ability to create mudroom/airlock entries out of their covered front porches. A great way to modernize these units.    Check out the video tour.

Listed at $795,000


Other Real Estate News 

It is always interesting to look back on columns I have written in the past. Here is part of a column that appeared in August of 2017; Avoid the Blues…Mistakes Buyers Make In a Seller’s Market. It is as true today as it was four years ago.

• Mammoth looks like it is heading into a seller’s market once again. Definitely in the low-end of the condo and home market. But unlike much of Southern California we haven’t been in a seller’s market for over 10 years. We’ll know more as we march towards the end-of-the-year holidays. Observers of Mammoth real estate believe most of the market has been undervalued the past few years. But where it goes is anybody’s guess. There are simply too many global, national and regional dynamics.

True “mistakes” are often a byproduct of either bad timing or poor choices. It would be hard to imagine that right now is bad timing in the Mammoth market. Unless the volcano blows. The local market experienced a substantial foreclosure and short sale phase since 2009. And a few drought years. That drove values down. But values have been on a slow increase. A big winter and the Ski Area merger hype has brought new enthusiasm into the market.

Ironically, many current owners are seeing it as a good time to sell. Without their new listings the market would be really hurting for inventory. If the market moves up materially there are likely to be even more sellers. And coincidentally many of these new sellers purchased at the height of the last cycle and they are selling for considerably less than they purchased for. They are finally liquidating their “mistakes.”

So bad timing can be a crapshoot. Many buyers at the very peak of the last cycle were hitching their wagons to the hope that Starwood Capital and Barry Sternlicht were going to do some Heavenly magic here in Mammoth. It was a reasonable assumption. But the Great Recession came along. Obviously none of them saw it coming. And we even had great snow years in 2010 and 2011.

Besides bad timing the other serious mistake is making poor choices. These are things we have better control over. I have a saying that I repeat to myself quite often, “Just because it is for sale doesn’t mean you should buy it.”  Some people need to follow the same advice. Or at least be real about what it is worth. Or what the ownership ramifications are. Heated real estate markets can bring out the worst in people. And some of the worst decision making.

Typical mistakes often come matched with personality types. Mammoth real estate buyers come in all “shapes and sizes” but some of the most fascinating characters and experiences come from the three primary types; the analytical, the emotional and the egotistical. Mammoth has plenty of analytical buyers. They are typically successful and can purchase a second (or third or fourth) home for a reason. They range from a variety professions and businesses. Some even get “analysis paralysis“ and never buy (we used to joke about asking for gas money). But analytical types don’t normally make the mistake of poor choices. And if they do they are small ones at best. It is the emotional and egotistical buyer that can get in trouble.

Emotional buyers in this market often purchase without seeing the big picture. They’ve had some very good times here in Mammoth (like exceptional skiing) and fall in love with a particular property they’ve seen or came across on the Internet. They fail to go though the process of an analytical. That’s where mistakes are often made. And since the Great Recession the egotistical buyer has almost vanished. They were great entertainment in the boom of the last cycle. They are bound to come again. Ultimately buying real estate in Mammoth should be an informed decision. But there are many ways of getting sidetracked.

Many years ago I wrote a column on incurable defects (it ran in the infamous 50-center). I said then that people can be staring at a gross incurable defect and they can’t recognize it, or don’t have the experience to recognize it. And once you own the property there isn’t anything you can do about it. The column went on to talk about these defects and their affect on the resale-ability (amongst other things). The column even said a “property can look great on a summer day, but how does it work after 400 inches of snow?” And today I can ask how does it work after 600 inches of snow?

So one of the BIG mistakes is not recognizing the incurable defects that will impact ownership in many ways, and maybe more importantly the ability to sell the property in the future. (As an aside, there are sellers in the summer of 2017 that are selling because they just experienced the winter of 2017. Their property might not be seriously damaged, but the experience was damaging enough.)

And “resale” is a funny thing. When the market is hot buyers rarely think about the resale potential, after all, everythingis selling. But this can be one of the deadliest mistakes because when the market goes soft a hard-to-resell property will sit. And when the market is soft is exactly when the owner may want to (or need to) become a seller.

Sometimes these incurable defects are hidden by shiny objects like granite countertops and snazzy decor. Properties in updated or remodeled condition are often good sellers in the Mammoth market. Many out-of-town buyers don’t have the time or patience or inkling to do renovations. So they are especially attracted to the updated and “turn-key” properties.

But many times sellers will do the remodeling or updating to simply hide the true (incurable) defects of the property. After many years (or perhaps a short couple of years) of ownership they have become acutely aware of what the incurable defects are. But they know the improvements can add value AND get a sale. These types of properties have performed very well in the past 24 months. They will perform even better if the market heats up and values rise. This scenario is especially true right now because finding a contractor in Mammoth to do work is nearly impossible. So buyer beware.

One of the interesting “mistakes” in this market is when buyers purchase expensive homes in substandard locations. Spending ~$1million or more for a second home is not to be taken lightly unless you are arriving on your own Gulfstream V. But just because the improvements (the home) look like it should be worth that kind of money the location could be screaming something different. The real estate principle of regression is alive and well in Mammoth’s residential subdivisions. Condos too. And learning about it when you become a seller is the wrong time.

And sometimes buyers simply get impatient and concede to “live with” the defects. Until they really have to. In the end, not all Mammoth properties are the same.

There are other fundamental mistakes. Not having a physical inspection of the property is one, no matter how good the property looks. In heated markets some buyers waive the physical inspection rights to make themselves stand-out to the seller. That can have pitfalls for both buyer and seller. Lawyers love this stuff.

Another mistake is not fully understanding the state of any existing HOAs. Most Mammoth condos have substantial HOA operations and they are all in various states of financial and operational conditions. And some residential areas have active HOAs too. The documents passed in escrow will have plenty of insightful information. Buyers need to read and comprehend before completing the deal.

…..Here’s hoping the fish are biting!

Thanks for reading!  Please stay healthy.
** Closed sale data is compiled from in-house files and public records.

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