Mortgage Explode Upward And Are Expected To Go Higher!
Market Summary – September 11 to September 25
Single-Family Home Inventory
Market Updates and News
Mammoth’s summer came to an end with some chilly days but the weather the last few days has been spectacular. There are hints of fall colors and the region remains relatively smoke free. Despite recent rains the region is very dry. Tourism has slowed but certainly not died. Daytime temperatures will be in the low 70s this next week. A perfect time to be in Mammoth.
As someone who has held regional public office for over 25 years, I try to pay attention to the local elections. I shun away from fanaticism in politics (and most things in life) but try to promote the process of discussion and debate about the important topics. My most recent Q&A—Election Special is a reminder to the community to engage. Election apathy runs rampant in Mammoth Lakes. The winners and losers in elections can be often be separated by less than a dozen votes.
The Town Council candidate bios are starting to appear and candidates forums are planned. One of the first bios is from a young woman and mother by the name of Amanda Rice. She owns a local catering company. According to her bio, she also “supports regulation of Airbnb and overnight rentals, and points to cities like San Francisco and Santa Monica”. I can’t wait to hear more explanation. But the SF and SM regulations aimed to control nightly rentals in neighborhoods that weren’t zoned for nightly rentals. She may have meant regulating like Truckee or Durango. These resort communities have restricted the number of legal STRs thinking that it would improve the availability of workforce housing.
But back in my March 20 newsletter I highlighted a series of articles in the Jackson Hole News that addressed this topic. Bottom line is that these restrictions are “feel good” but none of the officials interviewed could provide any factual data to prove any effectiveness. All it does is distort the market with more government meddling in private enterprise. And forget about enforcement.
This may become a fascinating Council election topic. Many local residents are indignant about the housing difficulties (what’s new in a mountain resort community?, and I lived here for 17 years before I could purchase my first home). For them regulating STR is a solution. But many of these same people (including Ms. Rice) have their livelihoods attached to tourism and the STR industry. And the vast TOT generation that the STRs produce also pays for the nice amenities like ice rinks, parks, trails, etc. and many other local services (including snow removal on the streets). And the STR dollars flow over-and-over again through the community. As I said on March 20, “I hope it stays this way” but some people like to bite the hand that feeds them. Hopefully the topic and debate produce some wonderful insights.
Favorite New Listing for the Period
These two new listings just came to the market this weekend. Both are the upstairs 2 bedroom / 2 bath floor plans at St. Anton. This is right at the Canyon Lodge parking lot and across the street from the popular Austria Hof. Great winter location but the project has a very nice pool and spa area too. Understructure parking. Unit #22 is south facing overlooking the pool, gas fireplace and in “turn-key” condition. Unit #34 is an end-unit overlooking the project entry, somewhat original condition but great light. With continued improvements at Canyon Lodge these affordable units are in the heart of the resort. Getting on the Mountain is easy from here. Financing available through Cross Country Mortgage.
Other Real Estate News
Tom Hodges is the long-time real estate and planning guru at Mammoth Mountain Ski Area. He has been making the rounds lately with a new “dog and pony show” visiting the Chamber of Commerce, the Board of Realtors and Town Council. I’ve sat through many, many of these presentations over the past 30+ years. They get people excited for the future, but the reality is that 50-80% of the “ideas” never come to fruition. Sometimes it is just reflective of industry trends or macro economics.
But there is one big difference in 2022 –– the Alterra ownership of the Ski Area and their financial structure and strategy. For them, it is all about raising capital, spending it, and in turn knowing how to generate increasing returns. And the hedging against bad winters that comes by owning (and being affiliated with) a broad base of resorts both in North America and also internationally.
This is so different from the Dave McCoy era where every winter was a financial struggle and serious mistakes were made (remember the People Mover?). The Intrawest era was marked by considerable on-mountain improvements but they were clearly focused on real estate development. But they also decided upon a short-term strategy here in Mammoth. Extremely high construction costs in Mammoth and “California” restrictions made it more attractive for them to develop in other states/markets.
The Great Recession crushed the Starwood Capital era and they lost interest quickly. Once billionaire Barry Sternlicht actually came to Mammoth it was clear he couldn’t appreciate the “SoCal-ness” of Mammoth. But that opened the door for Rusty Gregory to replicate and spearhead a new Vail Resorts-style conglomerate. All of the recent new construction and infusion of capital is clearly a byproduct of this Alterra affiliation.
I’ve already covered the ongoing improvements at Wooly’s Park, The Mill and the new snowmaking supply lines, etc.. But Hodges’ presentation displayed some interesting highlights and some reality for both what the future needs to look like and how they get to increased profitability, especially in this new IKON pass era.
To start, the new Chair 1 and Chair 16 will be fully enclosed at the bottom and top terminals (interestingly the presentation specifically referred to them as Chair 1 and Chair 16 — not their “Express” names from the Intrawest era). These new sixpack lifts will be the latest state-of-the-art lift systems. This style of lift system is increasingly effective at moving a massive volume of skiers and snowboarders up the mountain with less potential for human error and weather impacts. These lifts are now scheduled to be replaced next summer.
The short term plans also include a major expansion of snowmaking. They have recently completed the re-lining of the snowmaking pond adjacent to McCoy Station (the old Mid-Chalet). Hodges remarked that because of the deterioration of the old liner, the pond was only capable of being ~75% filled. The new liner will make for much greater snowmaking capacity. This winter will also see more “fan” style snowmaking guns down Broadway and eventually down Stump Alley. And there will be increased snowmaking towards Canyon Lodge and Eagle Base. The goal is to not only guarantee an early opening but also guarantee access to-and-from Canyon and Eagle at the prime early holidays.
The medium-term (4 to 7 years) capital projects are also telling. There is a heavy emphasis on food and beverage (“F&B”) enhancements. They include F&B renovations at the 4th floor at Canyon Lodge, the entire McCoy Station, a new facility at Chair 4 (and an anticipated new parking lot), and, ahem, a mid-mountain F&B facility at the top of Chair 10. It has been a long time since they have talked about this. But this was always to be the mid-station area for the east side gondola system. Intrawest envisioned this as a prime spot for a F&B facility (including a nightclub) because of the spectacular down-valley view from this location.
The mention of a F&B at the top of Chair 10 (there is a large flat area in the saddle) coincides with the stated Village Gondola extension to the top of Chair 15. Although it isn’t the medium-term plan, the east side gondola extension from the top of Chair 15 to the Chair 10 F&B facility (mid station) is the natural progression to complete the long-planned east side gondola system. Also hinting in this direction is the mention of, finally, real improvements at the Eagle Base Lodge in the medium-term plans (we’ve been hearing this for over 20 years).
All of this becomes more immediate as the result of the new reality of the Main Lodge Redevelopment plan. Hodges recognized the “earliest” any finalized approvals for any changes at the Main Lodge would be in 2025. He’s been through this before. There is major environmental review on the front end and the Forest Service moves slow. The Ski Area does have the “good graces” (Rusty’s term) of the environmental movement by preserving key, sensitive and threatened undeveloped lands included in the land exchange.
But the really profound, new statement is that “everything will be gone” in the Main Lodge redevelopment program. Everything. This is telling. The plan is to create a whole new skier service experience, beach/plaza and a variety of resort housing. This means ALL of the F&B, skier services, administrative offices, etc. of the current Main Lodge will need to be displaced to other locations. The medium-term projects will need to be in place before the Main Lodge area can be cleared. Basically, before the Main Lodge area can be leveled, the other lifts and mobility and services need to be in place. The east side “portals” of Chair 4, Canyon Lodge, and Eagle will need to be more heavily utilized in the interim. And maybe forever. The Main Lodge area may become more “exclusive.”
Wooly’s Park will see major expansion for this winter but this area is seen as a major year-round facility with coasters, ropes courses and the other summer facilities (displaced from the Main Lodge area). Hodges said they also anticipate bringing the administrative offices of the Ski Area down to this location (this is opposite the main garage of the Ski Area).
We’ll see. But this could be the beginning of the refined, long-term plans meeting the capital and impetus to make it all happen. Mammoth remains the crown jewel of the Alterra conglomerate (why do you think Rusty was the original CEO?). Let’s hope they want to spend the money to keep it that way.
I’ll be back in three weeks. The warm Pacific is calling.