IKON Pass Blackout Brings Sanity To President’s Weekend And Ski Week!
Market Summary – February 6 to February 20
The Mammoth Lakes MLS is reporting nine (9) real estate closings for the period ranging from a low of $225,000 to a high of 4,245,000. Of the nine (9) closings, eight (8) were financeable properties and four (4) were financed closings. There is continued overbidding on many new listings. The closings included two single-family homes over at $3.5M, both cash purchases. In the past, two sales like this would have been notable for a year of luxury home sales.
Even though the 10-year Treasury yield popped over 2% for a few moments last week, it closed the period almost even at 1.932%. There was also noise that the 30-year conventional mortgage rate pushed over 4% but most rate sheets are showing it slightly less. The endless economic, geopolitical and Federal Reserve ramblings will certainly keep rates bouncing around for awhile. We should be reminded that 40 years ago the conventional rates were 16-18%.
At the period’s end the condominium inventory is up five (5) to 22. A few new ones we’ve seen before. There were 16 new condo listings in the past two weeks and four (4) are already in escrow. There were agents working hard to submit offers on attractive properties only to be blown away in multiple offer scenarios by over-the-top offers. And offers with appraisal contingencies are almost guaranteed failure. Lots of frustrated buyers in this market. The inventory now includes five (5) Westin Monache units. Even though prices are up at the Westin they still might be some of the best values in town; once the refresh remodeling is all completed the project will be in excellent condition and the property is proven to have some of the best and most consistent revenue production. And because of the “Westin” clientele, it may even be recession proof……This last week there were several older, larger condos brought to the market in the Canyon Lodge and Village area and all were ~$1M. These should be a good test of the market in the next 30-45 days.
Single-Family Home Inventory
The inventory of single-family homes is up two (2) to 11. There were five (5) new listings in the period. The entry level is $1,245,000. The two newest low-end offerings will be interesting to watch. We’ll see if the market has “lost its mind”.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up one (1) to 88 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 15 to 125. This combined number includes 11 various vacant land deals in the outlying areas under $250,000. Some of these are properties that would have sat on the market for extended periods in the past.
Market Updates and News
Overall the weather has been spectacular. But the mid-winter warm and sunny weather is a double-edged sword. The longer one skis (and ages) the more the soft, “winter snow” (including fresh powder) is desirable. But with it comes inclement weather. “Perfect weather” for skiing can be personal preference, and lots of SoCal skiers and snowboarders love the almost beach-like weather. Thankfully the December snowpack is holding up and Mammoth Mountain, as usual, makes the best of the conditions. But at some point all of the non-storm weather indicates another drought winter. It certainly didn’t start out looking like that.
The weather has allowed local residents and visitors alike the opportunity to add other activities into the mix; a variety of cycling including hard core road biking out on Hwy. 395 to causal cruising around town. The melting snowpack has even allowed some hiking in the lower elevations. And the upper Owens River and Convict Lake are always attractions in these types of pleasant winter conditions. Based on the volume of people just out walking around or hanging out, geo tourism is alive and well. Their dogs are loving it too.
The IKON Pass blackout over President’s weekend is doing exactly as designed–spreading out the holiday crowd. In the past this was a crushing weekend, simply too many people over a short period. This weekend was big but not overwhelming. And now it appears some schools districts are offering the accompanying “ski week” break the week before the actual weekend. There were families here last week. This next week is the official ski week. This is traditionally a busy week for tourism and real estate. But the mid-week business still remains slower and the real estate market has to be nearing a point of exhaustion. We’ll see what the week brings. No major storms are in the forecast.
After last issue’s discussion of the recently approved Tesla charging station adjacent to the new Ice Rink, out comes reporting that a popular new crime is the stealing of the Tesla charging station cables. Apparently there is plenty of copper in the cables and thieves have figured out how to maximize the value. And they are apparently easy to just cut-off with the right tool. Maybe this is a good reason to have more than one charging station in town. We wouldn’t want a bunch of stranded Tesla owners. And seemingly a third of the cars driving around Mammoth these days are Teslas.
The Town of Mammoth Lakes, through Mammoth Lakes Housing, is now aggressively purchasing listed condos in the market. They are utilizing their cash reserves to purchase properties that will in-turn be sold to local residents who qualify for new loans, all subject to specific income ranges and employment, etc.. The Town is even willing to take small losses on the transactions if necessary. The Town is now competing on the open market with local residents looking to purchase on their own (including members of the growing work-from-home migration) or buyers looking to acquire low-end STR condo properties (which is one of the “sweet spots” in the industry).
The real estate industry’s publications and websites are starting to be filled with articles about “buyer’s remorse”. Apparently there is an increasing number real state buyers who made moves in the past 20 months who now regret their decisions. Purportedly HGTV will have a new series starting next month titled “Why The Heck Did I Buy This House?”. But the answer to buyer’s remorse is really simple; sell now before any market conditions change. Or not. It might take admitting to a mistake or an inappropriate emotional response, but we’re all human. I am seeing new listings in the Mammoth market that were purchased in the past 20 months. Some are actual good “flips” where the owner has made some substantial improvements to the property and are looking to cash out. Other have made minimal improvements/changes. Buyer beware.
And interestingly too, some new listings are properties that have been owned for decades (there is no sales data but the property tax assessment is the tell). These “legacy” properties and their owners are being nudged to sell at these high prices. It is even better if the property can qualify for a 1031 exchange or has a stepped-up basis. Others will simply justify paying the taxes on their windfall.
The imbalance between the volume of condos in Mammoth versus single family homes is often a question from many participants in the market. It certainly has been in the past 20 months. My Mammoth Real Estate Q&A this weekend in The Sheet addresses the history of why this is. After I finished the column I wondered just how many condos were built in the 1970s. I used an old condo reference sheet from pre-Internet days and determined that from the late 1960s to 1980 there right around 3500 condos built in Mammoth. Oddly, this was a period known for recession, inflation, stagflation, and generally poor economic times.
Again, the two residential sales exceeding $3.5M are certainly noteworthy, a continuation of the luxury market trend in Mammoth Lakes.
A 3 bedroom / 2.5 bath townhome at Villa De Los Pinos closed for $912,000. It was originally listed at $849,000. This is an “oldie-but-goodie” property on Chateau Road but realistically needs a full remodel including plumbing and much electrical. This specific unit sold in 2005 for $535,000.
Favorite New Listing for the Period
This is a coming soon listing and is different and has an interesting twist. I can especially relate to this property because at some point I think I will want another home close to Mammoth but at a lower elevation. And maybe with some extra land. This is a 3 bedroom / 2 bath home on 5.3 acres. It has a 200-foot deep well that “has never run dry” according to the neighbor. This is in southeast Mono County north of Bishop in a small enclave of homes surrounded by BLM land. This is a “reverse mortgage REO” — the bank gets the property back after the owner passes away. The REO/foreclosure business has essentially been gone for a few years now but these come through every once in a while (and they aren’t in Mammoth!). There’s always a “story” because they were often occupied by old timers in the area. They are also popular opportunities for buyers because of their affordability, but sometimes there are obstacles to financing. Most need some fixing up.
Probably going to be listed at $200,000.
Other Real Estate News
Despite increasing construction costs, supply chain issues and a tight labor market, it looks like it will be a very active summer of building in Mammoth. And if it all (or most of it) moves forward these improvements will be substantial for the community.
My real estate and planning brain sees the completion of the Creekhouse (Snowcreek Phase 7) project as significant. Just a few short years ago this project was in a tenuous position. The market demand and construction costs weren’t making it work. Building-out dozens of units towards completion was dubious at best. All of that changed in the past 20 months. Now the project has foundations poured almost all the way down to completion and has eager reservations/deposits on any unit available.
What makes this completion so profound is that it will “finish” a critical convergence of the Snowcreek Resort master plan. These last units meet at the intersection of a Mammoth Creek tributary, Snowcreek Phase 4, the Snowcreek Athletic Club and Fire Station #2 (see the photo at top). This is also where the Red Line shuttle turns around. This location has been an eyesore for years. The completion and aesthetics of the Creekhouse units in this vicinity may be a surprise for many Mammoth regulars. It will be a great change.
The Sierra Nevada Inn on Old Mammoth Road has new owners and new approved plans that eliminate the historic restaurant building on the corner (Jimmy’s/Red Lantern) and add new lodging buildings (cabins and villas) in the core of the site where the miniature golf course currently is. The plan includes a central “flexible lawn” gathering area including stages, all adjacent to the existing Rafters facility. The plan includes a full exterior upgrade and modernization of the existing buildings to match the new buildings. It may start this summer.
Down the street, there are some indications (the tenants are on notice) that the Mammoth Hotel renovation of the Sierra Center Mall may actually begin in the coming months. This is a beautiful plan that would bring 160 luxury hotel rooms right down to Old Mammoth Road across from VONS. This would further invigorate this commercial corridor that will ultimately be bookended on the south by the new Ice Rink/Recreation Center (scheduled to be completed this year).
And at some point, weather depending, the contractor will return to The Parcel site to begin construction of the first 81 units of workforce housing. Let’s hope they can move fast and not be stymied by the various snafus the construction industry is experiencing.
And a third phase of Obsidian Villas is up for Town approval. This is 33 new luxury townhomes, and like the first two phases, is wedged between the Sierra Star golf course and neighborhood affectionately deemed The Ghetto. This location moves up to Callahan Way just off of Main St. (being Lopez’s)….How long can this luxury demand last?
Thanks for reading! Please stay healthy.
** Closed sale data is compiled from in-house files and public records.