Thanksgiving Comes And Goes, Mammoth Readies For Prime Time!
Market Summary – November 13 to November 27
Single-Family Home Inventory
Market Updates and News
A solid crowd occupied Mammoth for Thanksgiving week and were treated to fantastic weather and snowy visuals. This weekend’s crowd almost rivaled any busy winter weekend. The Ski Aea was able to open Eagle Base for access and limited terrain. Mammoth Mountain currently has the most open terrain for skiing and snowboarding in the entire country. A fantastic start to the season. Everybody looked like they were having a good time. Colder temperatures and snow showers are in the forecast. Let’s hope Mammoth does what Mammoth does best — wringing significant snowpack out of limited stormy weather. At least the colder temperatures will be conducive to snowmaking. The busiest months of tourism are just about upon us. Ready or not, here they come.
Construction at The Parcel has been fascinating to watch, from the delivery and staging of the “boxes” at the Airport to the craned perfect placement on the job site. It happened fast. The boxes are now all stacked in place and the structural mass of the new workforce housing project is significant. And right in the middle of town. The Town’s projections for the potential of ~500 units at The Parcel now seems viable. Let’s hope the momentum continues. Construction at the Limelight and Ice Rink continues on, but the early snow was clearly annoying for the crews. Ideally they get buried in snow.
From my observation there appears to be a quiet crisis for good housekeepers in town. Some I know have recenty jumped ship to greener pastures and higher pay. Other companies are soliciting in increased ways and offering bonuses. If the velocity of real estate sales stays this way, it may be a good, new career opportunity for some. Hopefully not for me.
The infamous Amerigas lawsuit is set to begin trial on Tuesday (through next Monday) here in Mammoth. This is a variety of Snowcreek owners and HOAs suing Amerigas over the long standing propane supply and pricing agreement originally made by Tom Dempsey (the original Snowcreek developer) and Turner Propane (the local supplier Amerigas bought out). The arguments shall be interesting. The attorneys representing the plaintiffs have encouraged as many affected Snowcreek owners to attend any or all of the trial. Maybe ski in the morning and poke your head into the courtroom in the afternoon. An out-of-town judge will be conducting the trial.
My brief discussion about EMF (electromagnetic field) pollution in the last newsletter probably brought more interest and response than anything other topic of the last 10+ years of this newsletter. Hmmm…
And I had a Mammoth Real Estate Q&A column titled The Real Mayors of Mammoth? run in this weekend’s issue of The Sheet. I always get interesting, random comments from people. The first one early Thanksgiving morning was from the retired Superintendent of the Mammoth Unified School District. He liked the piece.
Two more Mammoth Ski & Racquet Club units closed, this time for $540,000 and $625,000. And just like last period, one of the buyers was represented by an out-of-town broker.
A very attractive lot in The Trails closed for $333,750. Cul-de-sac location adjacent to open space and big sun and views. One of the last undeveloped lots in the subdivision.
Two lower-end residential properties closed in The Knolls and in The Slopes, one for $870,000 and one for $900,000. These are 1970s and 1980s built homes. The single-family home market remains tight.
Favorite New Listing for the Period
This is a coming soon, real soon. Great utility and location in this smaller 3 bedroom + den / 2 bath home (1737 sft). Located on Upper Forest Trail and only four lots from Lakeview Blvd. and a Blue Line shuttle stop servicing the Village and Canyon Lodge. Spacious 1-car garage. Large primary suite. This has been a long-term rental for the last 20 years and is in the process of being cleaned-up. New forced air heater going in. Freestanding wood stove. Stack washer/dryer location on main level. Tons of storage. Sizable den can be converted to 4th bedroom or would make a great office/work space. Surrounded by beautiful homes and trees.
Other Real Estate News
Now is a good time to check-in with the STR/Airbnb industry on the macro and micro level. The national media continues to anticipate a collapse in demand for STR over the coming months. But so far the AirDNA data for Mammoth and the upcoming holiday period is not showing any slowdown. The early snowpack certainly hasn’t hurt.
Now that we are past the Thanksgiving blip it is all about the end-of-the-year-holiday period that should start the weekend of 17-18 and essentially run through the MLK Weekend of January 14-16. Barring any disasters, the prime four weeks of business here in Mammoth.
AirDNA is reporting the Average Daily Rate (ADR) for the upcoming holiday period is $542. This is up from 2021 at $482. This could be passed off as simply inflationary. But the ADR was $540 in 2019. The AirDNA data for the later snow season shows the ADR staying above $400 through April 2023. AirDNA shows there are currently 3,028 units in Mammoth on Airbnb and VRBO with 53% of these units listed on both platforms. The most common sized unit is a 2 bedroom/ 2 bath. Probably unique to the Mammoth market is that 99% of the listed units are “entire home rentals.”
Meanwhile, Airbnb is globally pushing to increase the supply of available properties for guests. From one of their recent posts;
“Mountain destinations, specifically where the cost of entry is high—ski resorts, for example— have been slow to add available listings year over year, and occupancy rates have increased in response to unrelenting demand. Telluride, Colorado, saw 29.7% higher occupancy in Q3 year over year, which was the highest growth in the period. The Colorado mountain town had experienced an available supply increase of just 12.3% vs. Q3 last year, while demand grew by a huge 64.5%. The market that saw the second-highest growth in occupancy was Aspen/Snowmass (19.7%), also in Colorado, which also saw supply increase by 12.3%, but demand had risen by 37.0%. Increases in occupancy were seen in other Colorado mountain destinations, such as Vail/Avon(12.5%) and Breckenridge (11.8%), which experienced similar trends in greater demand growth over supply growth.
The highest growth in occupancy levels among coastal destinations was found in Destin/Fort Walton Beach, Florida (13.7%), South Padre Island, Texas (11.2%), and the Outer Banks, North Carolina (9.8%). Similar to the mountain towns, these coastal markets tend to be top-tier priced and geographically supply-constrained. Destin/Fort Walton Beach saw supply grow by 21.4% year over year in Q3, while demand rose by 48.4%. South Padre Island grew available listings by 21.8% and demand by 39.2%. Available listings in the Outer Banks grew by 29.8%, and demand gained 48.1%.”
If AirDNA’s numbers are correct the total number of units available in Mammoth is actually down, and perhaps down significantly.
For current or potential owners of STR properties here in Mammoth or any other locations, AirDNA continues to be a good resource. A recent video explains how some of the younger generation is successfully evaluating specific areas and properties. (Warning, the video starts slow–click through to the meat.) Using their criteria is interesting as a comparison to Mammoth Lakes as an investment location. The real takeaway for Mammoth is that it isn’t the best place to invest in an STR (in this market it continues to be about usage more then ROI).
From a pure investment position, the best opportunities are in markets that have an AirDNA Marketminder score of 75 or more (A– or better). The score is a combination of ADR, occupancies, expenses, etc.. A couple of markets used as examples are Nashville, TN and West Palm Beach, FL. Mammoth’s AirDNA score is 52 or a B–. Mammoth’s occupancy runs 50-55%. This is pretty normal for mountain resort communities that have significant shoulder seasons. The A– markets run in the 75-80% occupancy range.
(This is what the Intrawest executives explained to me some 30 years ago and ultimately why they had to build condo hotel properties in Mammoth rather than pure hotels –– hotel lenders want to see occupancy rates far above the typical mountain resort rates of ~55%. They need to see ~80% or beyond. At the time, the condo hotel properties were proposed to be financed with long term conventional mortgages. That worked until the Great Financial Crisis of 2008 and ultimately the redlining of condo hotel properties by Fannie Mae. This redlining is still impacting the market today. And this is why the Limelight is actually so significant, it is a blended condo hotel and pure hotel. The lower floor standard hotel rooms will be owned by one entity (Aspen/Little Nell) and the upper floor penthouses will be separately owned condo hotel units.)
One of the other topics discussed in the video (and assessed by AirDNA) is the value of the local government restriction and regulation. It is emphasized that STR owners need to be in a business friendly environment. Mammoth scores well here. The restrictions in Mammoth are clear. The regulations are also clear but not onerous. Let’s hope new members of the Town Council do not try to change this status, its is clearly important for the STR business.
Other important criteria from the video; Do you like going to this area? (pure Mammoth). Are there 3-5 large attractions or landmarks? (does MMSA and the Sierra Nevada qualify?) Also, Do you have investor friends in the area? (the proximity to SoCal almost guarantees this).
And from other posts on the AirDNA site, they note that hotel occupancies are on the increase and Airbnb properties are being impacted, especially in urban areas. “Rentals aren’t suffering in all urban markets and Airbnb can still win back market share by focusing on resorts and small towns; rentals are 17% more in-demand than hotels in coastal areas and 10% more in-demand in mountainous destinations.”
“With hotels, what you see is what you get—from small and unfussy motels to big, glitzy resorts. But with rentals, every experience is truly unique. And this continues to be one of the key differentiators between hotels and rentals after the height of the pandemic. What does this mean for hosts? Don’t forget that it’s individuality that makes the rental experience special. While professionalizing and scaling matter, so does delivering memorable stays for each and every guest. This is especially important because rental demand is still historically high, reaching a forecasted 13.4% share of all accommodations in 2022 compared to 9.7% in 2018.”
For STR owners; if unique is what they seek….