Drought Winter Comes To A Close But December Snowpack Is Holding Up!
Market Summary – March 6 to March 20
The Mammoth Lakes MLS is reporting 23 real estate closings for the period ranging from a low of $415,000 to a high of $2,625,000. Of the 23 closings, 22 were financeable properties and 15 were financed closings. The closings were through the whole range of the market including eight (8) condos under $800,000 (ostensibly the new “bottom end” of the Mammoth condo market). Five (5) of the highest six (6) sales, all at-or- over $1.5M, were cash purchases. Four (4) closings were reported as “sold before listed”. Some sellers apparently don’t want to go through a true “price discovery” process by having their properties exposed to the market. In this crazy overbidding market a seller could easily leave a six-figure sum on the table. This period last year there were 18 closings.
The 10-year Treasury yield zoomed upward to 2.148%. Between the Federal Reserve and a small spread detachment of mortgage rates from the 10-year, the conventional rates are now right around 4.5%. For comparison sake, a $600,000 condo purchase in Mammoth with 25% down (a $450,000 mortgage) the 30-year payment is now $2,741 per month. At 3% (just months ago) the payment is $2,358 per month. A difference of $383 per month. This is a significant difference in many primary residence markets, but we’ll find out in the coming months how it will impact the Mammoth market. Jumbo loan rates are still being quoted under 4%.
To no surprise the mortgage industry is already reporting a significant decline in mortgage applications. Larger institutional lenders are already cutting employees. But I’m guessing the “heavy hitter” independent loan officers are welcoming a significant slowdown. The past 21 months have been a double-whammy of new purchase and refinance loan processing. They have worked at an insane pace.
At the period’s end the condominium inventory is down one (1) to 23. The total condo inventory dipped low this past week but there have been eight (8) new listings since Friday morning. There were 20 new condo listings in the past two weeks and five (5) are already in escrow. There are now seven (7) listings in the Westin Monache units including four (4) Studio units and two (2) 2 bedroom units. Two of the new listings are 1 bedroom units in the Village priced above $700,000. An increasing number of newer Creekhouse owners from the last two+ years are being tempted by the almost $1M in appreciation the properties are seeing. Two such units were listed this weekend. The demand for these luxury units remains high. This time last year there were 29 condos on the market.
Single-Family Home Inventory
The inventory of single-family homes is even at 14. The two newest low-end offerings that I’m “watching” have not sold yet. Average list price is $2.6M and median list price is $2.1M. This time last year there were 12 homes on the market.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up down five (5) to 73 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up one (1) to 107. In normal years the overall inventory starts to increase in mid-to-late spring and peaks around Labor Day. Lots of buyers hoping we see this pattern in 2022. This time last year the pendings were 104 and 146 respectively.
Market Updates and News
Another bizarre drought winter comes to a close in the Mammoth region. It basically hasn’t snowed of any consequence since the end-of-the-year holiday period. But the record December snow accumulation has allowed the Ski Area to remain open and in solid operation. And looking at snow totals around the country, Mammoth is still in better shape than the Utah and Colorado resorts and certainly better than Tahoe. The slopes on the east side of the Mountain are thinning but may actually make it until Easter (four weeks away and very late on the calendar). The Main Lodge side should make it until Memorial Day or beyond. Driving around the Slopes neighborhood (between the Village and Canyon Lodge) there are still massive piles of snow in many of the residential yards. The upper elevations above town appear to have decent snowpack. Let’s hope the heavy rains of October helped replenish the water table and backcountry lakes.
The ski and snowboard crowds have remained consistent; strong weekends but quieter mid-week days. So far there is no appearance of any negative gas price impact. I’m guessing the STR owners have had good winter income but not epic. But it should stay consistent for the next four weeks. People love the spring conditions on the Mountain and the prolonged daylight hours allow for “triathlon” opportunities; adding in some cycling, fishing, rock climbing, hot tubbing, etc. to the mix. Once Easter is past, it is only two months until summer. Let’s hope for a wet spring.
The Town’s major development projects still remain idle; the Ice Rink concrete slab is completed but nothing else has happened for months. And heavy equipment has sat for months at The Parcel. These projects should “come out of the ground ” in the coming months but there is no sense of urgency. But I’m sure it all has to do with contracts. The old Ocean Harvest building at the south end of the Sierra Nevada Inn property is surrounded by fencing and there is heavy equipment onsite. Looks like it will be demolished in the coming weeks. This will reduce the number of existing restaurant physical plants by another two. The new SNI owners appear ready to execute their substantial improvement program.
The town is pretty subdued as the transfer from winter to spring begins. Many local residents are sure to be planning vacations. It has not been a brutal winter but the hospitality business still takes its toll. Barring anything unforeseen Mammoth will have a busy summer.
Mammoth isn’t the only mountain resort community dealing with housing issues and questioning the relative impact of STRs. The Jackson Hole News ran a lengthy article on March 9. They looked at areas like Truckee, Breckenridge, Durango and Crested Butte that have all restricted STRs in some way in order to hopefully alleviate the workforce housing shortage. Each community has their own specific issues and admittedly the regulations are an “experiment”.
The article states “But, so far, there’s little evidence showing that regulating short-term rentals has a significant impact on freeing up housing for local workers.” The common answer from local officials when asked about the effectiveness of their program is: “We don’t know yet.”
In Crested Butte and Durango the local officials admit they have no data to support the STR restrictions and the impact on local housing; one official is quoted “I would assume it’s helped,” and another provides his conjecture “It just prevented it from being worse”.
After reading the trials and tribulations from other mountain towns, Mammoth Lakes and STRs are on sound footing. My recent writings have provided the history of this. Let’s hope it stays this way.
Condo sales in Meridian Villas, Sierra Manors, Villa de los Pinos, Sherwin Villas and Forest Creek all hit peak highs.
And then some doozies; a Summit 2 bedroom + loft / 2 bath condo closed for $1,310,000 or $1,167 per square foot. Fully remodeled unit with splashy modern decor. And a Mammoth Estates 4 bedroom / 3 bath townhome closed for $1,350,000. Remodeled at one point but already dated and somewhat worn. Sold for $818 per square foot. The Creekhouse appreciation is one thing but these are 50-year old condos without most of the modern amenities including private garages and forced air gas heating..
There were five Snowcreek Resort closings. It remains prime property.
Favorite New Listing for the Period
This is a perfect opportunity for the Mammoth non-conformist. I always recommend to buyers that owning at the Westin Monache is a “complete package”, that an owner should stay with the Westin front desk operation and NOT be involved with some third party STR arrangement. In my opinion it is best for the owner, the guests and the property as a whole. But some owners just need to do their own thing. This is a 2 bedroom / 2 bath unit in the “11” stack of the Westin. It overlooks the pool and looks south. Each bedroom has its own deck. This is the best floor plan and location in the project. This unit has NOT been refreshed, it is basically original (original owner) and has been on a third party rental program for years. Now it is ready for a new owner who can remodel and furnish it the way they want and rent it , or not, they way they want. This location should have minimal impact if the Limelight is ever developed.
Listed at $1,199,000
Courtesy Nexthome Mammoth
Other Real Estate News
I’ve worked though a fascinating era of real estate. And I could warrant considering myself a bit of a grouch. I learned the business the “old school” way. There was no other way. We answered the phone and took messages on multi-form tablets for our fellow associates. Owning a computer was barely a concept. What benefit was there to owning a computer? In the past three decades I’ve watched so many new technologies come and go. There were all going to make the real estate transaction better (and easier) for everyone involved. In reality “the more things change the more things stayed the same”.
One of the latest trends is the “transaction coordinator”. I suspect decades ago they were called “secretaries” and they afforded the boss to go have “three martini lunches” with important people (imagine having a three martini lunch these days?). But this was long before mobile phones.
The whole transaction coordinator concept has spurned an industry of its own; specialty software, initial and ongoing training programs, etc.. And “certification”, which may become a requirement in California in the future. The majority of today’s transaction coordinators are third parties, and not ones part of a larger high-producing team (which can make sense).
Transaction coordinators in the Mammoth market usually handle some/many of the administrative functions of an escrow, but their primary function is to see that all of the disclosures get signed by all parties. This is a BIG deal to agents. Having all of the paperwork signed on every little nook-and-cranny of the massive volume of paperwork (deemed a “complete file” by their broker) is a requirement to receive their commission check. And many of these agents live in fear of not getting their commission check.
The marketing ploy to agents to use a transaction coordinator is to “ditch the busy work”. But the problem I see is that the devil can be in the details. While these agents rely on their “TC” to get all of the “boxes checked” and signature lines filled, it detaches them from the file. And some/most of the critical thinking. It becomes an easy way to miss something important. There is nothing like an open file in front of you to make you think about the transaction. And furthermore, a mobile phone is a bad place to review paperwork, especially contracts.
What makes transaction coordinators incredibly annoying is that they know very little (if anything) about the transaction and yet they are like little barking dogs pestering you for the next documents. And few of them have any real organizational skills. Their emails can read like teenage blather — Hope you’re having the most amazing and wonderful day! It’s all about them. Some of them even act like they are in charge!
Meanwhile, the agent can easily lose track of what is really going on in the transaction. But be certain their “TC” allows them to get out and cultivate more business, or go skiing or play golf. Who needs to be concerned with paperwork? One of the real problems I see is newer, rather inexperienced agents using transaction coordinators. It must be a sign of “making it” (fake it until you make it?). They don’t even really know the documents and their meaning and purpose and they are handing the responsibility off to someone even less knowledgeable. Quite frankly, the whole thing is a poor reflection on the industry.
In the past few weeks I had an impatient agent telling me her buyers needed the personal property inventory,and now. Admittedly, it was my responsibility to provide it. But her TC had already returned the inventory (as well as all the other disclosures) to me several days prior including all of her buyer’s signatures. No big deal, but what else is she missing about the transaction? She’s obviously not reviewing the documents returned by her principal. Of course, her TC has it covered.
Sloppy business practices can be a feature of a hot real estate market. But as my favorite fishing captain likes to say “nothing good lasts forever.” Maybe we’ll see a future market where agents can’t afford a transaction coordinator. They may have to learn the business the old fashioned way.
Thanks for reading! Please stay healthy.
** Closed sale data is compiled from in-house files and public records.