Record December Snowfall, High Winds and Big Crowds Dominate The Holiday Period!
Market Summary – December 12 to January 2
This report is for the past three weeks covering the pre-holiday and holiday period. The Mammoth Lakes MLS is reporting 27 real estate closings for the period ranging from a low of $340,000 to a high of $3,132,500. Of the 27 closings, 25 were financeable properties and 14 were financed closings. Some impressive selling prices which I’ll discuss below. The closings included 12 sales over $1M including five (5) single-family homes. There were eight (8) condo closings under $600,000. Two (2) more vacant residential lot closings. This same period last year there were 34 closings.
The 10-year Treasury yield rose slightly to 1.512%. This time last year the yield was .917%. Some industry gurus are predicting higher rates in 2022 as a tag-along to inflation, but predictions are a dangerous game in this era. Other industry leaders point to the current mortgage rates in the low 3% range as still near historic lows, so stop complaining. I was at a small gathering this past week celebrating a local escrow officer’s retirement. It will leave a gap at the escrow company but they don’t seem overly concerned — the volume of new escrows has dwindled due to low inventory and a significant pause in re-financing. They have processed an amazing load of business in the past 18 months.
At the period’s end the condominium inventory is down three (3) to three (3). I’m sure there are offers on at least two of the units. There were eight (8) new condo listings brought to the market in the period and six (6) are already in escrow. Condo sellers have become very picky in this market, and rightfully so. It is challenging to be a Mammoth condo buyer in this market. This time last year there were 25 condos on the market including seven (7) units at the Westin Monache (what a difference a year has made in this segment of the market). The 2021 condo numbers are in the books and the Mammoth MLS is reporting 459 condo closings for the year. This compares to 440 in 2020 and 387 in 2019.
The 2021 condo closings ranged from $199,000 to $2.1M (2 sales at that number). The real standout number for this broker is the 70 condo closings at over $1M. Prior to 18 months ago, a condo closing at over the $1M was a less common event after the glory days of 2004-07. There were 34 condo closing over $1.M in 2020. There were only 20 in 2019. The average condo closing price was $696,000 in 2021 up from $558,000 in 2020 and $525,000 in 2019. Median sale price was also up to $610,000 from $475,000 in 2020 and $450,000 in 2019. Average days-on-market (DOM) in 2021 was 87 which includes escrow periods and properties marketed before new construction completion.
Single-Family Home Inventory
The inventory of single-family homes is down three (3) to 10 and this includes two (2) new ~$2M listings in the past few days. The average list price is now $2.9M, incredible. This time last year there were 16 homes listed for sale in Mammoth Lakes. There were 123 single-family home sales in 2021 ranging from $510,000 to $5,050,000. There were 76 homes selling for over $1M (45 in 2020). The average closing price was $1,471,000 compared to $1,072,000 in 2020 and $924,000 in 2019. The median sales piece in 2021 was $1,187,000 compared to $885,000 in 2020 and $785,000 in 2019. Average DOM was 94.
Vacant residential lots sold well in 2021 with 46 closings ranging from $105,000 to $1,450,000. Average price was $441,000 and median $365,000. There are currently only four (4) lots listed under $899,000 and one of the them is basically unbuildable.
There were 10 multi-family (apartment) properties sold in 2021 ranging from $650,000 to $1,199,000. Local rents have skyrocketed and values have followed. Some of these properties are quite old, I hope the new landlords are prepared for serious maintenance and repairs.
The total number of properties in “pending” (under contract) in Mammoth Lakes is even at 83 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down nine (9) to 111. This time last year the numbers were 77 and 110 respectively. And again, these pending numbers could potentially be much higher if there was available inventory. Getting past the holidays and the excellent snow conditions should only increase the demand for Mammoth real estate.
Market Updates and News
The first snowstorm of the period brought a major crowd to town by the Wednesday before the Night of Lights weekend. The second, third and fourth storms brought more significant snow and high winds. And holiday mayhem. Many places in the Sierra Nevada are reporting “record” snowfall amounts for December. The Christmas period was notable for road and highway closures and photos taken of near “405” style bumper-to-bumper traffic on Highway 395.
The major snow events mixed with peak visitor traffic have exposed the most immediate shortage in the Mammoth region labor pool; competent and willing snow removal operators. On both the public and private sides. Large piles of snow remain all over town waiting to be hauled away. With no storms in the 15-day forecast the break in the weather should help get the community cleaned-up, but continued storms could have been dangerously paralyzing. The periods of high winds created major disparity in snow deposition especially on roofs; some roofs are barely covered in snow and others required immediate shoveling to alleviate structural and potential unloading dangers. Roof shovelers were reported to be making $100+ per hour in the last week.
The big holiday crowd moved out in the past two days but with the great conditions and the end of the IKON Base blackout another crowd is sure to appear starting tomorrow. Hopefully some sanity comes with it.
Many new (second) homeowners are learning how their properties function when stressed by classic Mammoth snowstorms. There is LOTS of snow on the ground in Mammoth, and winter has just begun. The three wet storm cycles we’ve already experienced this season were three to four weeks apart. Let’s hope they continue. The winter is basically set at this point and tourism should be strong through spring. There should be record tourism and tax receipts and hopefully some of the revenue goes to figuring out how to secure sufficient snow removal operators. Since incorporation, Mammoth Lakes has done a fantastic job keeping the town accessible even in the heaviest winters. It has to remain a top priority.
The Bishop Airport opened for flights (United) during the period and reports are that it is far from a polished operation. And canceled flights throughout the country during the holiday also impacted the regional flights and operations. But the growing pains will be worth it. Now that it is a reality it should only become more efficient and effective. One large local taxi company was recently purchased by a Colorado-based company and they have brought additional vans to town to service the demand. And various local entrepreneurs are getting in on the transportation of guests from Bishop and back. A new gig economy could explode with all sorts of variations. It will be interesting to watch. Rates appear to be $75 per person per trip. A load of four passengers down and back will be an attractive enterprise for some, maybe even in my retirement…
On the Mammoth real estate front, the random inquiries during this end-of-the-year holiday period are always squirrelly and historically unproductive. Hopefully I don’t insult anybody, but the inquiries are slightly better than worthless. It has been this way for my 35+ years in the business here. Great snow conditions only make it worse. The older I get the less I want to even be in town during this period. In the future my voicemail may reflect I’ll be back in mid-January, or at least “after the 1st”. The holidays are a time for enjoyment, but some people just love to hear themselves talk.
One call I took during the holidays was a classic and rather surprising too. I may have been punked. The older woman wanted a cabin on 3 to 5 acres of land in the Mono County area. She didn’t want to pay more than $500,000 and the larger 5+ acres would be preferable and even better if it has a creek flowing through it. So I had the long discussion (again) explaining how the County is 96% government owned, protected in so many ways and blah blah blah. I tried to refer her to some websites. But low and behold she then tells me she doesn’t use computers, she doesn’t have email, and she doesn’t have access to the Internet. She wanted me to mail her listings. I wished her well, but after I hung up I started wondering just how someone would go about trying to find real estate in this era without having access to the Internet or email. Talk about a major disadvantage in a very competitive arena! You could get lucky but probably not. It worked okay in the 1980s and early 90s, but not today.
And dealing with out-of-town agents is always entertaining. They want the local agents to meet and show their clients the property, answer all their questions that are particular to the local market and/or the property, etc.. They basically want us to do their job AND still earn a full commission. The lack of inventory in their own markets has made them even more desperate and annoying. Some that I have dealt with in the past few months are real “hard sellers”. Each Mammoth agents has their own way of handling these scenarios. I simply prefer to tell these agents that they need to show their clients the property themselves. This usually changes the discussion. Recently some local agents are proposing new listing provisions to curtail commissions paid to non-local MLS participants. I think it sounds a little antitrust-like. I’ll stick to making agents show their clients the property themselves. And their clients should really know better.
A 6th floor Westin Monache 2 bedroom /2 bath in the preferred non-corner floor plan with two decks closed for $1,000,000 even. The Westin values are now rapidly returning to their original (new) prices from the 2006-07 timeframe.
A Tamarack Condos 2 bedroom + loft / 2 bath townhome closed for $754,000. This a popular “locals” project because of the private 2-car garage with all of the units and the central location across from the hospital and high school. The peak sale in the last cycle from 2007 was $417,000. Older condos continue to perform exceptionally.
A popular 2 bedroom /2.5 bath, 1-car garage floor plan in The Lodges closed for $1,011,000. This too is right at the pricing where these units sold new in the 2006-07 timeframe. The same unit in the next building over sat on the market almost all of 2019 with no offers. It was listed at $699,000.
Another 2 bedroom + loft / 3 bath, 2-car garage unit at The Pointe closed for $1,250,000 (cash). The high sale in the last cycle was in 2005 at $750,000.
A deed restricted work force housing unit on Sierra Nevada Road closed for cash. Weird. I’m betting mommy and daddy were involved.
Favorite New Listing for the Period
With the holidays behind us I need to get back to work. These are the Coming Soon listings my clients expect me to market in the days ahead;
• Snowcreek Phase 4 2 bedroom / 2 bath “flat” (no garage), turn-key rental property, with forced air gas heating and gas fireplace, wood floors, creek in back, steps to Red Line shuttle and SC Athletic Club.
Pricing should be around $699,000
• Horizons Four 2 bedroom / 2 bath, popular VRBO rental property sold in ready-to-rent condition, centrally located and easy walk to Old Mammoth Road commercial district, project has nice pool and spa area.
Probably priced around $599,000
• Westin Monache 1 bedroom / 1 bath on the 4th floor, the “refresh” remodeling is completed and the unit is booked solid.
Should be priced in high $500,000 range where the most recent comparable sales are.
Other Real Estate News
My regular readers know that I believe predictions are a fool’s errand, especially in this day and age. But here’s what we’ll be watching in 2022….
The most obvious has to be inventory. While the current inventory is ridiculously low I expect new sellers to be shaken out of this market in the coming weeks. They are being bombarded by solicitations. Much of the current timing in the market is associated with STR; many owners are in mid-stream of producing premium rental revenue. Any owners mulling a sale are weighing revenue versus the current selling prices. Some probably think they can execute the best of both worlds. Traditionally the new year brings new listings to the market. In Mammoth this doesn’t normally happen until late spring and early summer. But other sellers may be thinking that with the low inventory, high selling prices and great ski conditions this is the prime timing….”a bird in the hand….”
Which leads to pricing. The “stale” and lingering listings in the market are simply perceived to be overpriced by potential buyers. I hear all of their arguments and most are saying “No” to these listings. But it is a tale of two markets (and two buyers). The luxury end of the market is incredibly strong and prime properties are being bid-up, almost stratospherically. The more “turn-key” the better. The lower end of the market and especially properties that need remodeling are very price sensitive. Not all sellers are realistic about pricing, and some are simply gambling and hoping for “the greater fool”. But these increasingly high prices have piqued the interest of many owners. This is where the new inventory should come from. It will be up to the buyers to decide whether the prices will be supported.
Inflation is the wild card. Hedging against it alone could dissuade owners from selling. Or drive buyers to buy at even higher prices. If the inflation rate continue as it has in the past few months or goes even higher then prices could be supported at even higher levels.
Interest rates and mortgage availability should remain stable. Not so much prediction but reality. But there are always black swan potentials. In the past few weeks I’ve seen an uptick in cash purchases with dollars being pulled directly out of brokerage accounts. An inflated stock market has always increased Mammoth real estate sales and values. This could head into overdrive.
I’m reminded of the quote “Anything that cannot go on forever will not go on for ever.” I don’t know how happy 2022 will be but we’re about to find out.
Thanks for reading! Please stay healthy.
** Closed sale data is compiled from in-house files and public records.