Two Weeks To Easter But Crowds Wane Through Spring Break And Spring Skiing!
Market Summary – March 20 to April 3
The Mammoth Lakes MLS is reporting 20 real estate closings for the period ranging from a low of $250,000 to a high of $1,499,000. Of the 20 closings, 17 were financeable properties and 10 were closed with financing. The closings included two (2) more residential vacant lots and several significant overbid condo sales. One fully remodeled 50-year old condo closed for just under $1,250 per square foot. Probably the new all-time record in Mammoth Lakes. There were two (2) Creekhouse closings in the ~$1.2M range that were put to contract in August of 2021. Recent resales would indicate they are now worth at least $500,000 more.
The 10-year Treasury yield climbed again to 2.377%. Mortgage rates followed suit across the board. 30-year conventional rates are being quoted just below 5%, but this rate may be hard to come-by in the Mammoth market for most. Second-home loans backed by Fannie Mae and Freddie Mac now have increased fees of 1 to 4% as of April 1. Redfin reported in the last few days that “mortgage-rate locks to buy second homes dropped last month to the lowest level since May 2020.” But last month’s demand for second-home loans was still higher than February of 2020 (pre lock-downs).
With low inventory, overbidding, sky-high prices, and now higher mortgage rates and fees, the Mammoth market may take a breather, or not. Many local agents are looking to take a breather. Motivated sellers may (re) appear in the market, and maybe in significant numbers. If so, would more serious buyers return to the market? And as the statistics show there are still plenty of cash buyers out there. Interestingly, with the 10-year Treasury yield at 2.377%, the 5-year yield is now at 2.549% and the 30-year is at 2.424%. This market condition always brings interesting discussions about what this may portend. Lots of projections out there. Other market pundits are quick to point out that the 30-year mortgage rate is still significantly below the inflation rate.
At the period’s end the condominium inventory is up 10 to 33. There were 17 new condo listings in the past two weeks and five (5) are already in escrow. There are now eight (8) listings at the Westin Monache. There are now 19 condos listed under $700,000, so some “affordable” units showing up. Average days-on-market is now 36. Some condo listings are sitting with little buyer enthusiasm. But “shiny objects” sell fast and usually at more than asking. Almost to the level of absurdity.
All Mammoth condominium owners should expect higher HOA fees in the immediate future. I’ve just been through two budget processes and costs are simply going up and prudent HOAs need to get out in front of it. Capital improvement/maintenance costs are escalating; residing, re-roofing, asphalt, etc., are all going higher. The debate will be to do these projects now before costs go higher or to delay and hope costs settle down? HOA fee escalations alone can motivate some owners to sell ––this is a long standing trend in the Mammoth market.
Single-Family Home Inventory
The inventory of single-family homes is up one (1) to 15. The two low-end offerings that I’m “watching”; one has gone to escrow at (purportedly) far less than asking price but still at a substantial number. The other has now reduced the list price by $189,000. There were four (4) nice homes in the $1.5M to $2.5M range that came to the market during the period that have already gone to escrow. Clearly this segment of the market is still going strong –– many buyers think owning a nice Mammoth home is a good hedge on inflation. There are two new $4M+ listings that were both purchased within the last year. One owner is trying to make a killing, the other just looking to get out. One local for-sale-by-owner that had been listed on Zillow and social media for $845,000 is now officially listed at $925,000. We’ll see.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down another nine (9) to 64 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down 16 to 91.
Market Updates and News
Even with Easter two weeks away on the calendar it feels like Mammoth is rapidly heading into the dog days of spring. Bring on fishing season. Or maybe it is the gas prices. But the Tesla crowd has gone missing too. There has been the spring break crowd in town including families and young adults but the good spring ski and snowboard conditions should be more popular, especially on weekends. STR.com just reported that national hotel occupancy in the last two weeks as a whole was up 8% over the same period last year but seriously softened this last week. Mammoth appears to be similar to the national trend.
The Ski Area is pulling out all stops to keep Eagle Base open until Easter. They have aggressively moved snow around to keep access open (see above). Warm weather this next week could make it all disappear. Canyon Lodge and Main are in classic spring condition. Canyon only has to last until Easter also. Main should be good through Memorial Day.
The old Ocean Harvest building that more recently housed the Red Lantern and Jimmy’s was demolished in prompt fashion in the past two weeks. I’m sure the sight had some old local residents reminiscing about the old Ocean Club days when the basement was a popular nightclub (those were the days?) It looks like the Sierra Nevada Inn’s new owner, Springboard Hospitality, is ready to move forward with their major additions and renovations. Interestingly the company’s CEO and driving force is named Ben Rafter. Hopefully this means the Rafters restaurant and bar will be lovingly preserved and reinvigorated.
The high gas prices remind me of the 1990’s. Back then the old guys in my office would always joke that we should ask for “gas money” after taking people out and showing them property. Those were definitely the lookie-loo years.
The sale of Seasons Four #152 is of special interest to me. This is actually the true 1 bedroom + loft / 2 bath floor plan, NOT the original 2 bedroom + loft floor plan that is quite common in the project. The bathroom in the loft was built such that it splits the loft into two small but separate sleeping areas. The Town does not allow this addition/modification today. I originally sold this unit to a client back in the early 1990s and then again represented them as sellers in 2013. It sold for $205,000 back then. Today it is FULLY remodeled and modernized. Was listed for $849,000 and closed for $920,000, or $920 per square foot. The old condos in Mammoth are performing at an exceptional level.
An Aspen Creek 2 bedroom / 2 bath closed for $701,000. It was listed for $630,000. This unit is subject to $15,000 special assessments over the next three years (at total of $45,000) for new roofs, new siding, new windows and more. Based on inflation and scarcity and what contractors are telling me, this assessment could easily double or triple while the work gets completed.
Other notable overbidding occurred at Snowcreek I and Crestview.
A refreshed 1 bedroom / 1 bath at the Westin Monache closed for $599,000.
Favorite New Listing for the Period
This 2 bedroom / 2 bath condo at Sierra Manors has some real sentimental attachment for me. Well, not this exact unit but the 2/2 right next door. It was my very first real estate listing some 36 years ago. I had it listed for $54,900. I had the listing for a couple of years and I never got it sold. The family who owned it took it off the market and sold it many years later through another agent. But the real lesson learned was about incurable defects. This unit is located right on Old Mammoth Road; there is no direct parking, there is road noise and traffic of all sorts right out in front, and the unit is below grade. All told, that was a tough market to start in let alone trying to sell a seriously compromised property. Today, this new listing has a good chance of selling. Low HOA fees, wood burning stove, and close to restaurants and bars. As an STR, I wouldn’t count on lots of repeat clientele.
Listed at $599,000
Courtesy Coldwell Banker Mammoth
Other Real Estate News
I’ve recently received questions about the Main Lodge redevelopment project. It seems like there is some hype building. The 15-year land trade process is completed and the Ski Area owns the land. The privatization of the previously leased land (20 acres) now allows for much easier real estate financing. We’ve seen early iterations of the master plan but more detailed planning documents are expected in the near future.
The existing Main Lodge is basically old and decrepit. It is a relic of the past and has to be a maintenance nightmare. It is dysfunctional in so many ways. But the history is so fantastic it is almost like it should remain, not….Most ski area planning and development has moved away from large base lodge buildings. They are cumbersome (and expensive) and do not promote the concept of mobility. The plaza and “Beach” concept is in; more open space with multi-functionality and smaller buildings specifically dedicated to particular skier services. And all of it should be more accommodative to public transportation. The Mill at Chair 2 is a small prototype example.
The mobility concept incorporates how guests move into the resort, around and through the resort, and eventually out of the resort. Each step needs to provide the guest the opportunity to gladly spend money. In the era of cheap annual ski passes (IKON and Epic), the corporate goal/metric is to push the average skier-day revenue as high as possible. From daily demo skis to pitchers of beer. And of course annual beanie designs.
There is serious logistics to removing the old Main Lodge and creating the new buildings and amenities. All while not losing the operational side. It is already happening in small ways. But the demolition and building season is short. Somewhere in the near future we may have an idea of how they intend to do it. It also needs to be plugged in to Alterra’s capital plan.
Beyond replacing the Main Lodge services and amenities, there is bound to be plans for a five-star hotel and other real estate development including a variety of lodging units from condo hotel to luxury properties. And there has been talk for years about the old gondola building being preserved for not only historical purposes but also for a meeting, convention, and events venue. It actually works pretty well already and could become a valuable part of the overall plan.
But what is the time frame for this to happen? Don’t hold your breath. The specific planning for the Village (North Village) occurred in 1991 and 1994. I was a young man and had a front row seat on the Planning Commission. Now I’m a senior citizen and I’m resigned that the Village won’t grow far beyond what it is today. It is maybe 30% of the original plan. The Limelight Hotel (Aspen Ski Co.) probably has the best chance for development, and it is stymied over costs. The Mammoth Brewing corner was slated for a hotel, but I think we can agree that it has met its highest and best use. Speaking of highest and best uses, I proposed years ago that most of the vacant land around the Village should just be turned into parking lots. And maybe space for pop-ups.
But un-developed developments are one of Mammoth’s hallmarks. They have a long history. Beyond all of the undeveloped sites in the Village (YotelPad?) there are two empty hotel sites in the middle of Sierra Star. One on the lake has the “best wedding venue in the Sierra”. The new base lodge facilities at Eagle and potential hotel at the Eagle parking lot have gone nowhere. I have the old Snowcreek Resort/Sherwin Bowl Ski Area story board in my office. It shows lifts and a village in the Meadow. It would have been fabulous. The recently purchased Sierra Nevada Inn property had been slated for a massive redevelopment of condo hotel and retail. And what happened to the ambitious Main St. redevelopment plans pushed by the Town?
And a question I have; Do a significant volume of guests really want to stay at the Main Lodge area when there are other more vibrant places to stay? The 9,000’ elevation is not always that pleasant. Don’t the bulk of guests want to stay where the action is like the Village or the ever increasingly popular Old Mammoth Road corridor? Or maybe something more natural and walkable like Snowcreek?
For now I’m very skeptical about the residential real estate development at the Main Lodge property, and this has been the driver of the whole privatization of the land for the last two decades.
And based on all of the factors (especially the history at Eagle Base) there is a high likelihood that Sprung structures will be part of the Main Lodge redevelopment landscape for decades to come. I’m sure the glitzy plans won’t show them. Of course they will be deemed “temporary” until they become so permanent that future generations won’t know they were only supposed to be short-lived. History doesn’t necessarily repeat, but it does often rhyme.
Thanks for reading! Please stay healthy.
** Closed sale data is compiled from in-house files and public records.