Mammoth Real Estate Sees Serious Overbidding In Luxury Segment!
Market Summary – February 20 to March 6
The Mammoth Lakes MLS is reporting 22 real estate closings for the period ranging from a low of $349,000 to a high of 2,175,000. Of the 22 closings, 21 were financeable properties and 15 were financed closings. Some overbidding pushed closed sales into $1,100 per square foot range on larger condo properties. The closings included six (6) condos closing over $1M and two (2) over $2M. Residential closings now indicate that $1M is the entry level price for a home in Mammoth, no matter what the condition or location.
The 10-year Treasury yield closed down at period’s end to 1.724%. Money flowed into the safe haven of bonds driving prices up and yields down. Expect mortgage rates to remain volatile and nobody should expect any bargains. Lending guidelines for Mammoth condos continue to change and utilizing experienced lenders in the Mammoth market is highly advised. Buyers with 25% or more down should enjoy streamlined reviews of their final loan applications. Sellers need to be considering this when looking at offers.
Following the condo tower collapse in Florida it looks like “HOA questionnaires” are going to come under greater review by lenders, insurance companies, etc.. And one tech start-up, InspectHOA.com, recently received substantial funding for their new business model — to warehouse HOA information including all financials, project condition based on reserve studies and expenditures, insurability, and more so that HOAs and projects can be compared side-by-side. This could become a fascinating tool for buyers, and in my mind, could increase or decrease the value of certain HOAs/projects.
Getting all of the HOA data may be a challenge but California already has a progressive HOA data related law in place (the Davis-Sterling body of the Civil Code). Today, condo buyers in California receive (via the escrow) a comprehensive HOA information package that is compiled and retained by the HOA’s designated clearinghouse (normally the HOA’s accounting firm). It is certainly one step that has made transacting Mammoth condos more sane in the past decade. But if California decides this information should be more readily available to buyers while “shopping” properties it would be an interesting step. I can see consumer advocates pushing for it in the future. Lenders may jump on board too.
At the period’s end the condominium inventory is up two (2) to 24. There were 12 new condo listings in the past two weeks and three (3) are already in escrow. What sells and what doesn’t sell appears to be hit-and-miss. Newer and/or remodeled is definitely the best attribute. But proximity to the Village, Canyon Lodge and Eagle Base are bringing the best premiums (of course it is winter and the winter buyers are here and these are the most appealing properties to these buyers). Not all listings are being bid-up to closing. Closings this period at White Mountain Lodge, Solstice, MeadowRidge and Snowcreek I all sold for less than the original list price. One new listing today is in the Westin Monache “11” stack. Arguably the best floor plan and location in the project. The new listing price is $1,199,000. These are original owners who paid $1,099,000 in 2007. They’ve waited a long time to be “whole.”
Single-Family Home Inventory
The inventory of single-family homes is up three (3) to 14. The two newest low-end offerings from the last period have not sold yet. One made a slight price reduction. Average days on market is 78.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up down 10 to 78 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down 19 to 106. Low inventory is one thing but at some point all of the mayhem around the world and the subsequent media coverage has got to impact all markets. But every real estate market I communicate with continues to have low inventory and strong buyer demand.
Market Updates and News
The Mammoth region experienced more beautiful weather during the period but a couple of small cold fronts did penetrate the high pressure-type weather. Each brought random inches of snow but no significant addition to the snowpack. Mid-week tourism remains flat. The IKON blackouts actually do what they are supposed to do. The weekends before and after the President’s 3-day holiday weekend continue to show very high relative occupancy.
The Ski Area announced that as part of Alterra’s 2022 $344 million capital improvement plan Chairs 1 and 16 (Broadway Express and Canyon Express) will be replaced with new six-pack chairlifts this summer. But wait, this was the plan for 2020 but was scrapped due to the pandemic. Hopefully they have paid for these new lifts in 2020 dollars rather than 2022 dollars. These two chairlifts are the most heavily ridden lifts on Mammoth Mountain.
Meanwhile the Alterra plan also calls for the 2022 completion of the $65M base-to-base gondola (California Express) at Palisades (the new politically correct name for Squaw Valley and Alpine Meadows). This lift has been in the works for years and will radically change the “mobility” of skiers and snowboarders across the two resorts. Mammoth can keep dreaming (over 20 years now) about such improved mobility on the east side of the Mountain.
The big news out of the Town is that they intend to start new code enforcement on local business signage. Apparently they are blaming the “relaxed” position during the pandemic for all of the non-compliance. But the reality is they haven’t enforced the sign codes for years. One big problem — finding somebody brave enough to be a code enforcement officer. This position has been a laughable revolving door the past 30 years. It is the fastest way to become the most despised person in town, a classic small town feature.
I remember working on the drafting of the new sign ordinance some 30 years ago and it may have been the biggest political war of the 90s, and that is saying something. The public meetings are memorable in my mind to this day. Ironically, there were several good-old-boy businessmen who fought viciously for their large back-lit Main St. signs. Today, the some of the signs are still there but the men are long gone.
The Town continues to monitor STR activity and is now using a new software platform Rentalscape to do so. Their website highlights The Problem, “Unregistered properties, unwelcome changes in the neighborhood’s character, declining home values, and continued squeezing of affordable housing are just few of the important side effects cities face with the rise of short-term rentals.” The software has been in use since October of 2021. The Town is presently investigating “large enforcement cases”.
Mammoth condo owners have been receiving forms from the Mono County Assessor for Personal Property Tax related to business purposes. I’m familiar with filing this form because I own a business in Mono County. They tax business equipment, fixed improvements, furniture, supplies on hand, etc. every year. Items are added and subtracted over time. But now the Assessor has decided that STR owners need to file appropriately and pay similar taxes. This is new and I’ve never seen this before. But it does make sense. Many owners are confused. I’m sure many of the letters end-up in the trash.
I’m wondering how the State Board of Equalization differentiates between when the taxed items are business usage and when they are personal usage? Is there a form to break down rental days and owner stay days? Will it be prorated? Seems convoluted in the hybrid scenario. Also, I was thinking about some things. Is this a good use of limited County resources? Furniture items in these STR properties devalue quickly. Most can’t have more than $5,000 in actual personal property value. So this generates ~$55 in annual tax revenue per unit. The administrative cost for each filing has to be greater than this. Especially if the County pursues any sort of review or compliance. This will be interesting to watch as it unfolds.
Mammoth Realty Group broker/owner Stephanie Cook’s most recent mass mailer (she’s been pounding the mail for 25 years) states LAST Chance to sell your property at TOP DOLLAR! So there it is, the top of the market is called. It is all downhill from here. You’ve been warned!
The Hooper built townhome on the corner of Canyon Blvd. and Hillside Dr. right above the Village closed for $2,175,000 cash. It was originally listed at $2M even. This is 1986 square feet of living with a 2-car garage. Built in 2015. $1,095 per square foot.
Right up the street and across from the Westin Monache entry, Grayfox #2 closed for $1,760,000 cash.This is 3 bedroom / 3 bath. It was originally listed for $1,599,000. $1,071 per square foot. Built in 2006. This specific unit sold in 2011 for $697,000 as a short sale (remember those?).
Creekhouse 1403 closed for $2,008,000 or $919 per square foot. This 3 bedroom / 2.5 bath 2-car garage townhome was purchased new in July of 2019 for $857,000.
An original condition Mammoth Green 2 bedroom / 2 bath closed for $870,000 cash. It was listed at $769,000.
Favorite New Listing for the Period
Here is a bargain in the low end of the residential market. Great location for year round use but with strong winter orientation. This is the quiet section of upper Forest Trail located between the Village and Canyon Lodge. Easy walk to the Blue Line shuttle that services both. Beautifully remodeled (2020) and a really fun mountain home, 2 bedroom + loft / 2 bath with a modern built 2-car garage. Large enclosed solar room in front and spacious decks front and back. The rear deck is very private and has ample seating and a large self contained spa. Great light throughout the home. This is a smaller home but has super utility. Sold furnished. This is ready to enjoy with minimal effort. Check out the video tour.
Listed at $1,295,000
Other Real Estate News
A recent news report about domestic wood burning out of the United Kingdom caught my attention. And based on the global oil/gas situation it makes me wonder whether there will be a renaissance of heating local homes with firewood. But first a little history.
The U.S. Environmental Protection Agency (EPA) put domestic wood burning in Mammoth Lakes under great scrutiny around 1990 (30+ years ago). At the time there were hundreds if not thousands of open fireplaces and “old time” (think black, dirty and dingy) wood burning appliances in Mammoth condos and homes. Mammoth experienced winter nights of still air and incredibly thick smoke (it was a “blue hue”).
The 1990 Town ordinance, mandated by the EPA, required “certified” wood burning appliances in new construction and retrofits at the ownership transfer. Upon the sale of properties any wood burning fireplace or appliance had to be retrofitted to a clean burning, low particulate emission configuration (then known as EPA Phase 1 and 2 appliances). There are probably a few thousand of these retrofitted wood stoves and fireplace inserts still in town, some being used on a regular basis. And there are still some un-retrofitted open fireplaces still around. There was also a logical campaign to get existing owners to make the upgrade before a transfer of ownership. The retrofits were really a win-win.
The new regulations impacted the real estate industry including buyers, sellers and those involved in transactions. The local agents became the educators about more efficient and environmentally friendly wood burning. Since then the volume of wood burning has significantly declined and the nights of serious air pollution are in the past.
Interestingly, domestic wood burning has never come under pressure from local environmentally focused groups or individuals. But the recent news report from the U.K. states that wood burning for domestic heat has come under pressure in the U.K. by the government and environmental groups (even though these efficient heaters run on a renewable resource — trees). And recently many Brits want to burn wood for home heat; “economic conditions including rising fuel prices and actual delivery disruptions, many prefer to shift or refocus on burning wood.”
But the U.K.’s version of the EPA has a new revised report that the claims of damage to the environment and health have been greatly exaggerated. Especially with modern appliances that significantly reduce the release of the fine particulate matter (PM) that is the greatest health concern. And from the article, the British wood fuel industry argues “we are surrounded with nearly endless trees and many are dead or dying.”
All of this sounds familiar and timely. With escalating oil and fuel prices, wood burning may come back in vogue. And properties with wood burning appliances (or capability) may see greater buyer demand. There are even properties that have modern forced air gas heating systems and a wood burning heat source. This has been attractive in the past but probably more so in the future. There are luxury townhomes built in the 2000s that have this configuration. The Lodges and Timbers are two of them.
It will be interesting to see where this convergence of market forces will take us. Maybe the Town will be forced to allow wood burning appliances in new construction again. But for sure there is substantial fuel for domestic heating all around us and a great volume of it needs to be harvested. And the sooner the better.
Thanks for reading! Please stay healthy.
** Closed sale data is compiled from in-house files and public records.