Take Your Pick; Ski, Fish, Or Buy Mammoth Real Estate!
Market Summary – April 17 to May 1
The Mammoth Lakes MLS is reporting 17 real estate closings for the period ranging from a low of $300,000 to a high of $2,560,000. Of the 17 closings, 15 were financeable properties and 11 were closed with financing. The closings included six (6) condominiums under $650,000. There was another Creekhouse resale closings at over $2.1M, just under $1,000 PSF. The sellers paid $1,095,000 for the property less than seven (7) months ago. Amazing.
The 10-year Treasury yield moved only slightly up to 2.887%. It threatened to go over 3% at one point. Conventional loan rates are now well over 5% and most likely in the 6% range for second homes and investment. The jumbo rates still appear to be under 5%. Despite the increase in rates there are still buyers looking in the market and making offers. At some point cash buyers may have a real advantage in the market negotiating on price, but not yet.
At the period’s end the condominium inventory is up one (1) to 34. There is certainly no big rush of inventory coming to the market as the ski season winds down. There were 14 new condo listings in the past two weeks and four (4) are already in escrow. There are 18 condos now listed under $700,000. Some listings are sitting on the market, others snapped up quickly.
Single-Family Home Inventory
The inventory of single-family homes is even at 18. There were three (3) new homes brought to the market in the period.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down two (2) to 64 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up three (3) to 94. Continued low inventory, higher interest rates, the spring shoulder season, agents going on well-deserved vacations, and more should be pointing to a slower real state market. But there are still buyers poking around.
Market Updates and News
The town has clearly slowed but there are plenty of spring skiers and snowboarders, including a variety of ski camps, enjoying the runs. It is incredible that the December snow has hung around. In this new IKON era the Ski Area needs to reconsider how it closes the Mountain down after Easter. The last two weekend crowds have been funneled into the Hwy. 203/Main Lodge Road and it is simply ridiculous. Quite contrary to any ski area mobility concept. Maybe the new Chair 16 will help. The Canyon Lodge parking lot is valuable and there needs to be more skier access into the core of the Mountain from there. Spring skiing, even in a marginal snow year like this year, is extremely popular. Part of the fun is all of the kooks and vagabonds who show up.
This was the fishing opener weekend, finally back on a normal calendar. The classic man-groups with their assortment of boats were in town. The weather cooperated for the lake fisherman on Saturday morning but the wind machine has now done its best to ruin the fun. The forecast for the next two weeks is for breezy/windy conditions and moderate temperatures. Boaters beware. The month of May looks to be the usual turnover work from winter to summer, and vacations for many. Hopefully this includes me.
The Mammoth Community Water District noticed the entire community that we are on immediate water Level 3 restrictions. Landscape irrigation is now limited to two days a week and new seeding and planting is prohibited. Summer rain showers will be welcome but the lightning that typically comes with it won’t be. Many in the STR business have already expressed concern about the potential for summer smoke.
The major Town-related construction projects are now well underway. Truckloads of metal framing have been delivered to Mammoth Creek Park West as well as an assortment of mechanical lifts. The Sprung structure skeleton is projected to be built in the next 30 days. It will be the first realization as to how big this structure will be. Last week the Town Council allocated more dollars to the project. Expect this to be a 30-40 year trend. At The Parcel there is heavy equipment moving all around. It will be nice to see some buildings framed-up. But clearing a dense forest to create building sites takes significant effort.
After I mentioned the new listing of an un-refreshed (remodeled) Westin unit in the last newsletter, there have been a few interesting revelations. I have always recommended new owners at the Westin Monache stay with the Westin front desk reservation program. But I could be changing my mind. One local off-site company is managing five units in the Westin. The revenue numbers look good and their fees are far less than the Westin. They report no difficulties in managing the units (namely getting the housekeeping done). And under this scenario a Westin owner can remodel their unit to their own desire/taste.
One very compelling angle came from an online guest comment dated from January of 2022, “I have stayed at the Westin previously, booking directly through Marriott/Westin, and booking through this property saved us the additional parking and resort fees levied by Westin.” Fascinating. And by-the-way, the un-refreshed unit that I mentioned has already gone to contract/escrow.
Last week I had the opportunity to talk to local rock-star designer Corinne Brown in an after-hours meeting. One topic that came up was the resurgence in popularity of the interior natural wood paneling that is found in many of the condos built in the late 1970s and early 80s. Apparently it is “hip” again. For years I have pointed out that this type of paneling is something that is almost irreplaceable today. But over the years owners have tore it out, painted/stained it, or just let the guests beat it up. Properties that have this paneling still intact might be the next hot properties to remodel.
Local commercial properties were being shown this last week to numerous potential buyers/tenants. Interest actually seems to be increasing.
And a recent trend I’ve experienced; less than perfect ski days (windy, wet) have “buyers” calling who want to see property, and immediately. There has been no previous contact or discussions, no interest in specific properties, no attempt to be pre-qualified, etc. The expectation is just drop everything and drive us around and show us property because we aren’t skiing today. Is this some new trend? A byproduct of wearing masks and lockdowns? Hmmmm………
More impressive closings at Sherwin Villas, Chamonix, Mammoth Pines, The Summit and Val D’Isere.
A nicely remodeled 1 bedroom at Horizons Four closed for $500,000.
A refreshed Westin Studio closed for $490,000.
Favorite New Listing for the Period
This home is located at the entry to The Trails subdivisions and is unique in the realm of Mammoth homes. Built in 1999, the living/great room is on the ground level. Upstairs is 4 bedrooms, 2 baths and the laundry room. The home has large, panoramic views to the south and tons of sun. The living level spills out to a wonderful stone patio and lawn backyard that is surrounded by pine trees and other natural vegetation. Due to the prevailing wind and sun the ground floor doesn’t get buried in big winters. The kitchen features extra floor-to-ceiling cabinets and pantry/porch with extra storage and utility. Forced air heating and gas fireplace. Check out the video tour.
Listed at $1,259,000
Other Real Estate News
A reader recently commented that I seem to be obsessing about ‘price per square foot’ when reporting sales lately. He stated that it is a poor metric for valuing properties. And it is. But it does have its place, especially in some parts of the Mammoth market.
Real estate valuation is never precise. There are too many variables. And as we have learned in the past 22 months, throw human emotions into the mix and values can get somewhat illogical. Here in Mammoth, properties with breathtaking views or special settings/locations can certainly spark this emotion. Incredible design and construction, remodeling and staging can too. Or even a few great days of skiing.
The old real estate phrase “what the market will bear” is ultimately what the value of any property is––what a buyer is willing to pay and what a seller is willing to sell for. This changes through time. Buyers and markets come and go. And ironically even the best appraisers bring their own biases to the process. Sometimes even laughably.
The price per square foot (PPSF) evaluation of a residential property has become more commonplace in the new Internet age. Why? The more advanced Multiple Listing Services (aka MLS) now have expanding data fields including doing the math; dividing price by square footage. This has provided a new separate line item of PPSF. From there the MLS data is populated to all of the websites like Zillow, Realtor.com and all of the various broker’s and agent’s websites. It is more visible than ever before and the public has come to give it some credence. Sometimes just because it is there. And sometime because it helps justify their opinion of value.
The PPSF metric is a nice ‘quick and dirty’ method to get to some baseline valuation. But it is not to be relied upon for any definitive value. Radical deviations in PPSF can be a way to spot anomalies and/or identify properties that are grossly over priced or underpriced. But again, so many variables. The comparable sales approach is still the best valuation technique for residential properties, but there are variables galore too.
In a smaller market like Mammoth, the PPSF is a good measure for comparing existing properties against new construction. This is one of the reasons I’ve been throwing some PPSF numbers out. It isn’t important to everybody but it does give some perspective. Today, I’m not sure anybody (besides Hooper and Chadmar??) really knows what new construction is costing these days. Some buyers will use the numbers to decide whether to buy a home versus a condo, or build a new home versus buying an existing home. Many buyers in the Mammoth market are natural “analytical types” (that’s why they can buy a second home), so the more data the better in their minds (which can also lead to analysis paralysis).
Right now the most profound reason to look at PPSF in the local market––we are seeing 50-year remodeled condos selling for well above $1,000 PSF. This is luxury home range. Really nice luxury home range including prime locations. The PPSF metric is most valuable in the older condo segment of the market. There are thousands of these condos in town. Many are very comparable. Most are priced in the $550-600 PSF range. The PPSF metric helps buyers understand what they are really paying for upgraded and turn-key units.
For example, last week I showed a Woodlands townhome to a potential buyer. The listing agent called me later to follow-up. She has been a top-producing agent for decades and worked in my brokerage for many years. We were discussing some of these $1,000+ PSF recent sales of older remodeled condos compared to her listing. We both agreed that it is somewhat perplexing. An owner could spend significantly for a remodel and still be at ~$650 PSF in total and have a fabulous townhome including strong STR potential. And the property is 10 years newer (and it has natural wood paneling still intact).
The math is interesting. But not definitive. But the PPSF metric gives it some perspective. Obviously some buyers don’t have the time, inclination, or patience to do a remodel. But in the current market they are paying a substantial price for immediate gratification.
Thanks for reading! Please stay healthy.
** Closed sale data is compiled from in-house files and public records.