Widespread Sickness Subdues Post Holiday Period, But Not Real Estate!
Market Summary – January 2 to January 23
This report is for the past three weeks covering the post holiday period. Serious illness has impacted much of Mammoth the past three weeks including myself. This has been like nothing I’ve witnessed in my 41 winters living in Mammoth. In the past we called it “The Mammoth Crud” and everybody just took their medicine and worked through it. Not this time. Thankfully the snow storm cycle came to a halt and gave everybody some reprieve, it could have been far more impactful…..The most photo comments I get are from the exotic aircraft I shoot on the tarmac at Mammoth Airport. This recent one may be the wildest ever; a 2-seater military-type aircraft with massive jet engines. Like your personal F-16 without the armory. All for play. Notices on the side said “Experimental aircraft”….The toys around Mammoth are clearly getting more impressive.
The Mammoth Lakes MLS is reporting 32 real estate closings for the period ranging from a low of $390,000 to a high of $2,850,00. Of the 32 closings, 29 were financeable properties and 18 were financed closings. More impressive selling prices and overbidding. The closings included 11 sales over $1M including five (5) condos which included two, basic 2 bedroom / 2 bath condo hotel units in the Village. There were seven (7) condo closings under $600,000.
The 10-year Treasury yield rose significantly to 1.747% at the end of the period. We’ll see where all of this goes and how it impacts the market. Demand for Mammoth real estate was full-tilt this past week; multiple offers and overbidding were the norm. The one rate sheet I regularly scrutinize had some interesting disparity; while the quoted 30-year conventional rates moved into the 3.625% range, which would be expected based on the movement of the 10-year, the 30-year jumbo rate (up to $2M) remains right at 3.0%. And the super jumbo rate (up to $5M) is quoted at 3.25%. Based on Mammoth’s new home prices, this may be important in the future.
At the period’s end the condominium inventory is up nine (9) to 12. Now we’re talking. Looks like the new year( higher prices) will shake loose some new inventory. But don’t expect the inventory to last. I’ve got three (3) new condo listings in the last few days and the interest level is insane. There were 23 new condo listings in the period and 13 are already in escrow. There will certainly be more in escrow this next week. Some of the new listing prices are approaching $1,000 per square foot and beyond.
A good deal of the interest is coming from out-of-town agents trying to represent buyers. Some of them are incredible presumptuous and unprofessional, especially compared to the majority of Mammoth agents. It doesn’t inspire me to do business with them. And they ask lots of basic questions that any agent representing a buyer in this market should know. One, in the last 24 hours, responded to my new listing at the Westin Monache within 30 minutes of the property being listed. He was convinced his client should utilize an off-site rental company to “save” on the standard Westin front desk management fees. Good luck with that thinking. Other agents seem almost desperate to earn commissions; I’m guessing they are looking at their 2021 tax liabilities
Single-Family Home Inventory
The inventory of single-family homes is down five (5) to 5 (five). It was down to four but one high-end deal fell out of escrow. The newest and least expensive listing is a home I’ve driven by thousands of times in the past (commuting). It is know for its inverted roof line in the front. Not my favorite design, but it will sell. Certainly not a great time to be house hunting in Mammoth.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down nine (9) to 74 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down 14 to 97. The numbers clearly reflect the time of year, the low inventory and more. The pendings certainly don’t reflect aggregate demand in the market.
Market Updates and News
Despite fantastic snowpack, great winter weather and special events, the crowd has been subdued in the past three weeks. A variety of illnesses have impacted both local residents, guests and “would-have-been guests”. It got me, otherwise there should have been a regular newsletter last weekend. I could barely type let alone form sentences. The town is clearly recovering but the whole experience is going to make everything that much tighter. People are beat-up from the holidays and all of the snow and weakened from being sick. And don’t forget the serious housing shortage. Throw in a few extra shots of growing, general apathy. Everything is just going to take longer and be more expensive until we get through this. But the guests may be in a similar boat. This weekend was busy but not crushing, especially considering the great snow conditions and weather. The temporary Covid shutdowns at the local schools will end tomorrow.
The Mammoth Grand Prix featured spectacular conditions and visuals for the national television audience. It doesn’t always work out this way. This is a tremendous marketing opportunity for the Mammoth region. This event has been a “highlight reel” in the past for incredible performances especially on the super pipe. This year was an all-around grand slam. This was the final event before the Winter Olympics in Beijing. Some Mammoth locals qualified. Let’s hope they can go, compete and stay healthy.
The end-of-the year holiday “buyers” are always a group unto themselves. They rarely pan-out to have any substance. But the last three weeks we have experienced the “we’d like to see some properties as we’re leaving town” buyers. Forget it, and who’s got the energy. Decades of experience has shown these types of “buyers” are just as bad. Real buyers see new listings and get in their cars and drive to Mammoth. This is what is happening right now. The bonus is they can get some good slope time in as well.
A recurring question I’m hearing; Has STR destroyed Mammoth like other places?? The answer is clearly “No”. While the intrusion of STR into residential neighborhoods in many communities has been a major negative, Mammoth has been long prepared and experienced in this STR arena. Many of the condo projects developed in the 1970’s were specifically designed for STR. The “protection” (zoning) of the single-family neighborhoods from STR has been in place since prior to the Town’s incorporation and has been reaffirmed by referendum in the past decade. The STR enterprise model has been well entrenched in Mammoth for decades. The Town and community actually thrive on it. And the Town’s ability to produce incredible amounts of TOT (bed tax) remains one its greatest assets. Despite the upheaval STR has created in many California and other mountain resort communities nationally, it is business-as-usual here in Mammoth Lakes.
Escrow closing delays and wire transfer nightmares are an ongoing and growing concern in the local real estate business. My favorite escrow officer recently reported that staffing shortages and inexperience at the Mono County Recorders office has caused unnecessary delays in actually completing the recording of deeds and transfers (I can personally attest to changes at the Mono County staffing levels). This has delayed the actual closing of escrows much to the chagrin of buyers and sellers who are anticipating specific closing dates, all because of (perceived) paperwork snafus. Oops, you can’t move in yet.
Even worse, the wire transfer ALERT issue has become even more alarming. This is for real. The hackers are becoming incredibly proficient at “spoofing” bogus wire transfer emails and some buyers have actually made the mistake of following them. Other, more attentive buyers have caught the hackers in the action. Today’s purchase agreements and escrow instructions have extensive disclosure and instruction for “safe” wire transfers, but major problems are still happening. We may go back to the age of “certified bank checks”. When you’ve seen what I’ve seen in the past two weeks the thought of a pure digital currency is frightening. Your money can be gone in the blink of an eye. And probably not recoverable.
The Realtor® Associations are moving the industry away from the usage of “master bedroom”, etc. The are recommending “primary, secondary, etc.”. Me personally, if we’re heading this way I am going to be utilizing the concept of Bedroom 1, Bedroom 2, Bedroom 3 and so forth. Let’s see if I can have the discipline in my Remarks and videos. Tough to teach an old dog new tricks.
A variety of 1 bedroom condo closings pushed the upper sales range in projects like Juniper Springs Lodge, St. Anton, Grand Sierra Lodge, Snowcreek I and White Mountain Lodge. An early phase Snowcreek I upstairs 1 bedroom + loft (1 bath) got pushed up to $665,000. Amazing. Nice unit to own, but….
A Seasons Four 2 bedroom + loft / 2 bath closed slightly over $800,000. This was nothing special, no major remodeling. Peak sales in the last cycle never pushed over $500,000 for this floor plan.
A 4 bedroom / 3 bath 2-car garage Fairway Home townhome closed for $1,570,000. It had been listed for $1,800,000. Maybe some reality in the market?? I doubt it.
Favorite New Listing for the Period
I could showcase a few new listings but this is the one I’ll highlight. This is a 2 bedroom / 1.75 bath at Horizons Four and is being sold in absolute “turn-key” and ready-to-use and/or rent condition. Hardwood floors in great room, carpet in bedrooms and vinyl plank in the baths. Upgraded recessed lighting throughout. At this point in the market this is great utility and space for the price with outstanding rental potential. It has many five-star rental ratings. The H4 project has been a super popular rental project for decades. “Everybody has stayed there!” The rental demand is very strong both summer and winter and even during the off-season (mostly fisherman who consider it their “Mammoth home”). This specific unit is right across from the common area BBQ area and down from the popular pool and spa area. Check out the video tour.
Listed at $579,000.
Other Real Estate News
I recently closed (during the period) the “Bodie Hills 880 acres” sale, the video tour here. This isn’t a Mammoth specific property but it provides for an interesting discussion about real estate in the region.
My readers will often hear me discuss the “reversion” of land ownership in Mono County. I know the subject well because I have been involved in these sales, mostly representing sellers. Many visitors come to the region and think all of the open space land is readily available for development; “so why are real estate prices so high?”. But I have to inform them that the County is “96% government owned”, and it is between the Federal government via Wilderness Area, National Forest, Bureau of Land Management, etc., and the Los Angeles Department of Water and Power (LADWP). And trust me, these entities aren’t selling any land.
The “reversion” is actually from coming the policies and actions of the National Forest and from increasingly pro-active Land Trusts. This recent sale of the 880 acres south the Bodie Hills/Mt. Biederman Wilderness Study Area will eventually become a classic example of this reversion. The sale itself does not complete the reversion but almost certainly secures the futue transition.
Many of these properties became “private” ownership back in the ~1900 era. They were “homesteaded” properties. The 100 acre “Cunningham” property on the western shore of Mono Lake was. It was the #1 Forest Service exchange piece for the recently completed Main Lodge land exchange. There were dozens of other miscellaneous pieces all over the western United States also included in this exchange. It took over 15 years to complete. The recently transacted Tioga Lodge property was part of this original homestead too.
The 880 acres in the Bodie Hills has been under private ownership for well over 100 years. The most recent current owners had owned the property since the 1990s. They had a variety of ideas as to what could happen on the property over the years. One of the sub-parcels had actually been mapped into 40 acre parcels. But there were no actual developments/improvements on the property. And as time often does, the owners became less interested in any sort of development and became more interested in the preservation of the property.
This is where my role comes in. The aging owners really want to see the property remain undeveloped in the future. But they also didn’t want to “give it away” or donate it. They wanted top economic value for their estate. I was compelled to market the property as a fantastic off-the-grid opportunity (which it is) all the while dancing with a variety of entities who desired to acquire and preserve the property.
Ultimately one of the key factors in any property destined for reversion to government ownership is an appraisal (the dreaded appraisal). The problem is there are typically very few comparable sales to form the foundation of an acceptable valuation. It often becomes contentious. It is a constant problem in this rural area (I’ve watched the Mono County Assessor’s office struggle with this for over 20 years).
Luckily for my seller, the Wilderness Land Trust (WLT) became seriously interested in the property. We were able to coordinate an appraisal on the property with a Lake Tahoe based approved appraiser who I have worked with in the past. The appraisal was found acceptable to the Bureau of Land Management (BLM) and we were able to proceed with an escrow. One keys to dealing with agencies like this is to keep them on a short leash, they will typically delay and take any amount of escrow period they can get away with. We were able to come to an agreement for a relatively quick closing.
The WLT was able to secure their financing for the transaction and we were able to close a couple of weeks ago. Now the WLT will work with BLM to “clean” the property of any negatives (in this case a handful of old campfire rings) and they will proceed over the next 5-10 years to process the conversion of the property back to federal ownership. The once privately owned 880 acres will revert to public ownership. The Bodie Hills Area continues to be under pressure by gold mining interests, so there is substantial interest in seeing this micro-region becoming a designated Wilderness Area.
A couple of decades ago Sunset Magazine ran an article referring to the eastern high Sierra region as The Accidental National Park because of the high percentage of government land ownership. In many ways it has the characteristics of a true National Park. And these major reversions of land back to public ownership will only accentuate this in the future.
Thanks for reading! Please stay healthy.
** Closed sale data is compiled from in-house files and public records.