Mammoth Real Estate Sales Report – February 26, 2023

Major California Storm Makes For A Quiet, But Buried Weekend In Mammoth!

Market Summary – February 12 to February 26

The Mammoth Lakes MLS is reporting three (3) real estate closings for the period ranging from a low of $619,500 to a high of $935,000. Of the three (3) closings, all three were financeable properties and all were closed with financing. The closings included two (2) Village condo hotel units.

The 10-year Treasury yield jumped again to 3.949% and of course mortgage rates rose with them. The 30-year conventional mortgage is now basically at 7%. Some of the lending industry participants that I deal with had some interesting information; Fannie Mae and Freddie Mac are tightening their lending standards starting next week. Transactions with high loan-to-value ratios and borrowers with high debt ratios and low credit scores are simply going to have a tougher time getting qualified. The buyer/borrower squeeze continues. BUT, buyers of second homes who intend to do STR can now switch to an investment purchase loan and use rental income to both offset the mortgage and help with debt ratios. “The computer (AI—artificial intelligence) underwriting system will weigh all borrower and transaction factors before deciding on approval or eligibility. So each application/file will be reviewed on an individual basis”. (The old loan contingency becomes increasingly important).

How this AI system verifies the STR revenue will be something to watch. Perhaps it will monitor sites like AirDNA, Airbnb and VRBO rather than rely on any stated (past) income/revenue. Or maybe both. The occupancy rates and average daily rates (ADR) are already well documented online. How artificial intelligence and the real estate industry are marrying is interesting for the future. Mistakes will be made. I touched on some of it in The Sheet last weekend—maybe this newsletter can be written by a bot in the future?

Another one of my favorite lenders who has completed hundreds of loans in Mammoth but the bulk of his lending is in the Inland Empire told me that he has seen an uptick in refinance inquiries and applications. Apparently some owners (not necessarily in Mammoth) have great, existing low interest rate loans but also have equity that they need to tap into and a HELOC is not available to them. Inflation is killing them to the point that they will double their interest rate to gain some cash. The question is will Fannie Mae now let them do a cash-out refinance?

And one of my favorite financial writers pointed out this last week that the volume of outstanding HELOCs is currently 50% of the volume of 2007. Interesting. Obviously this is due to the very low interest rate 1st mortgages (original and refinance) and the rising values of the past few years. I’m thinking this factor alone could lead to far fewer distressed and foreclosed properties in this cycle than in 2008. But we shall see.

Condominium Inventory

At the period’s end the condominium inventory is down four (4) to 29. There were two (2) nice listings withdrawn from the market in the period. Are these “don’t have to sell” owners? There were five (5) new condo listings in the period and none have gone to escrow. The new listings include two properties at Aspen Creek Condos. These units are facing ~$45,000 assessments for new roofs, siding, windows, etc.. Contractor availability, material costs, supply chain issues make these renovations a daunting task. Some buyers do think if they can purchase these units at a significant discount that the location alone could warrant the future uncertainty…..There was another 1970s built turn-key 1 bedroom unit listed at a high price. We’ll see if the market supports these new listing prices.

Single-Family Home Inventory

The inventory of single-family homes is up three (3) to 11. There were a total of four (4) new listings in the period but one new listing in the Mammoth Slopes above the Village ended up with five offers and has already gone to contract. The appeal of this smaller but modern and contemporary home obviously caught the attention of many buyers. It certainly shows there are buyers in the market for the right product. One other new listing is a to-be-built home by long-time Mammoth contractor John Hooper—2800 square feet, 4 bedroom / 4.5 bath in the Snowcreek Crest. Listed at $2,450,000. This won’t last, I’m sure they are already negotiating. I purchased a to-be-built home from John years ago and it stands as one of the best investments I ever made.

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is up seven (7) to 37 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 12 to 57. There was a clear uptick in showings and sales. The holiday weekend period clearly brought interested buyers into town. But it proves one of my old axioms about Mammoth real estate; “selling is a function of people in town.” The Internet changed some of that, but maybe this is a sign we are headed back to basics. There were several multiple offer situations in the period. Interestingly, there were two (2) vacant lots in Mammoth going to escrow. The real questions is; how many more sales could there be if there was more and better inventory. I know I have some frustrated buyers.

Market Updates and News

The quiet at my desk is almost uncomfortable. After weeks of peak tourism and almost constant movement and reverberating snow removal operations, the low guest numbers in town and huge piles of new snow make it eerily quiet. The heavy equipment guys must have worked steadily through the last two nights. The big California storm impacting central and SoCal forecasted and produced substantial road closures and great road uncertainty. By mid-week last week travelers were basically told to stay away. There were a volume of powder crazies who just had to come. Many rushed out of town today before the next storms come only to find long lines and gridlock resembling the 405 just to get to Hwy. 395. Nobody can say they weren’t forewarned.

The roads into and out of Mono County were substantially closed most of the weekend. Snow volume and wind and white-out conditions were prevalent. Oh, and a few big wind drifts too. Caltrans got the lanes south of Mammoth cleared in time for this today’s exodus. Both Mono County and Inyo County reported numerous abandoned cars that were impeding snow removal operations. The level of irresponsibility of people and their vehicles is going parabolic. Apparently the level of abandoned cars in Inyo County caused the sheriff to make a “stay at home” order this weekend. The County’s resources were “tapped out.” Oddly, I was working on the “Other” below during the week. The abandoned vehicle situation is becoming a threat to public safety and creating additional costs and hassles for property owners. It is almost at a breaking point. New laws and ordinances are needed. I like the the idea of it becoming a revenue source at commercial and residential parking lots. Can someone create the app? I’m just wondering what percentage of these abandoned vehicles out on the Highway are EVs?….

At least one local HOA has decided to increase (surcharge) the monthly dues of owners who are doing STR. One has tacked on an additional $30 per month for STR owners. This will get attention and if it doesn’t come under some legal challenge it could become a trend, especially in some of the downtown projects with lots of smaller units with a high percentage owner occupancy. From my observation, STR units definitely burden the HOAs resources more than non STR units. But this Mammoth condition has existed for decades. I anticipate some sort of debate, or not. Maybe the STR owners will just accept it. Or if it grows to such a large number there could be some sort of class action. This is going to be an interesting part of the STR evolution in Mammoth. Between this and young Council members who want to limit STRs to improve (?) the workforce housing situation, we live in interesting times in this arena.

Rumors persist that a second hotel project will start in the Village this summer. The Mammoth Lakes Hotel was fully re-approved last spring and the existing commercial tenants were given notice to vacate at that time. Then they were give a 12 month extension. This 101 room condo hotel is a great project for Mammoth and the Village. Hopefully it happens. The site consisting of two parcels has to be the crappiest place in Mammoth proper. It is a terrible eyesore in town and visible from some of the Village. This is the remainder of the old industrial area of town that was included in the North Village Specific Plan in the early 1990s. The old Mono County “yard” existed just to the west where the parking lot is. (Years ago this was the location for the massive and infamous “Yard” site for the Mammoth Lakes Jazz Jubilee—I can personally attest that members of the Greatest Generation consumed copious amounts of alcohol at this location. Great times were had by them!)

This Berner St. site will require the tear down of the existing buildings (thank goodness) and most likely some environmental remediation. The plans show two levels of understructure parking and two levels of units. The units/rooms are all King and Queen Studios with kitchenettes and washer/dryer. It is labeled a “Residence Inn boutique hotel by Marriott” and is functionally similar to what was proposed at the YotelPad without the mod quirkiness. It doesn’t appear that they intend to try to pre-sell the units before launching construction. This should be popular accommodations in the Village. The overall design looks like it could easily be built in modules as the YotelPad was proposed and how we recently watched the first workforce housing building come together at The Parcel. The large flat roof is a bit of a concern, but with global warming we certainly will see less snowy winters in the future. This will be a great compliment to the Limelight.

Noteworthy Sales

Not much to talk about but the two sales in the Village do have some noteworthiness; both have lackluster locations and sold on the low end of the price spectrum. But the closing prices were far from any discounting. And not the norm to see productive STR properties selling in the middle of peak season.

Favorite New Listing for the Period

Here’s a Creekhouse resale that has a great location adjacent to the creek drainage and Meadow area. The living area and deck are south facing for toasty passive solar heat in the winter and excellent outdoor space in the summer. Views of the Sherwin range and beyond. This 3 bedroom / 2.5 bath, 2-car garage townhome (spacious 2,145 square feet) is local resident owned and has LOTS of custom features not found in other Creekhouse units. Sold with furnishing so almost “turn-key”. This is the classic “condo that lives like home.”

Listed at $1,699,000

Courtesy The Snowcreek Property Company

Other Real Estate News

With the wild weather and very compromised driving conditions this weekend between Mammoth and SoCal, it is an appropriate time for my discussion titled “How to drive in an ant farm and other fun winter driving tips and observations.”

I’ve witnessed plenty of moronic driving the past two months, but this has become rather normal in recent Mammoth winters. When the walls of snow build up in a big winter it only makes matters worse. I’ve always referred to these conditions as an ant farm, like the one you had as a kid. Remember them tunneling around in the white? The higher the elevation the more descriptive this is. Some of the higher elevation neighborhoods get crazy. Thankfully the Town’s effort to remove the big snow banks in the main commercial corridors brings some level of sanity. It might be one of the best uses of local tax dollars. Otherwise the accidents and road rage levels would certainly be higher. What happened to “Mammoth Just For Fun”.

What is so typical in Mammoth, both winter and summer, is most drivers are either going way too fast, or way too slow. There rarely seems to be that happy medium. But it seems like it gets worse in winter. And this is often where the problems lie. The ant farm conditions make it far worse. How in the hell do people unfamiliar with town even know where they are going? Everything is buried. This is why the commercial district clearing is so important. I watch drivers baffled at finding the condo they rented. And of course there is always some impatient driver behind them. The laugh is that they were probably in the same boat just a few hours or days before.

The first rule of driving in the ant farm is slow down. You aren’t on the slopes any more, and you probably ski or ride too fast or out of control up there. There’s no reason to bring it in to town. The ant farm tends to make roads even icier, but more crucial is the lack of direct sight lines. Lots of Stop signs are buried and just because you can’t see them doesn’t mean they aren’t there. And flying up to any intersection at the alarm of drivers on perpendicular roads is often what causes a variety of accidents. The key is to stop early and then poke yourself out into the sight lines. My second winter in Mammoth I smashed into a nice BMW that flew into the intersection like this. My old truck had barely a scratch. The BMW was towed away. It almost felt good.

One thing novice drivers in the ant farm don’t realize is that there is no place to “bail out.” And that becomes even more dangerous for any pedestrians (and now winter electric bike riders). The evolution of blown (cleared) sidewalks in Mammoth is fantastic. But they aren’t everywhere. With no where to bail out, making stupid maneuvers that make other drivers react is not a great idea when the only place to go is into an eight foot wall of frozen snow, or into another vehicle.

Walls of snow also create tunnel vision in some people and they don’t even recognize it. They think they are on a toboggan run and speed now becomes the objective. And trust me, running (or sliding) into the rear of a piece of snow removal equipment is not a good idea.

Another intriguing phenomenon in these heavy winter conditions is the disappearance of lines in the road due to snow and ice cover or they are worn away by the snow removal equipment (like most of Mammoth right now). Many drivers completely lose their spacial awareness of the road and where their basic lane position should be. It is almost comical, but it can be seriously dangerous. Especially if it is also snowing. Basically, drivers need to stay right just like if the lines were there. And yes there is a meridian for left turns on many of Mammoth’s main roads, you’re not in Olancha. Without recognizable lines on the pavement it is common to see drivers make left hand turns from the right lane and right hand turns from the left lane. This is not an ideal situation.

There’s one thing that the last two months in Mammoth has proven; just because you own a $100K+ German SUV doesn’t mean you are capable of driving it in snowy and icy conditions. Some such owners think they are driving some invincible vehicle that has ultimate traction, that is until they slide through an intersection or run into the vehicle stopped in front of them. It is all so predictable when you observe these drivers. Maybe self driving vehicles are a good idea in these conditions (not). I recently saw one on Hwy. 395 on its side up over the snowbank. How did that happen?

Speaking of drivers bashing into other cars, the bottom of Canyon Blvd. coming into the Village has become the most classic crash location. Again, some drivers think they are still on the ski run. The biggest problem in this location is that in Mammoth winters there are places where “sometimes streets become parking lots”. And in this condition the street just becomes an extension of the Village plaza. Admittedly, when it is all covered in white it is difficult for the unknowledgeable to tell the difference. Except the shuttle buses don’t drive in the plaza.

This “sometimes streets become parking lots” phenomenon is also common at Eagle and Canyon Lodge. Common courtesy makes it all work until some jerk comes along. But reality these situations can be rather dangerous; the roads are often icy, people aren’t paying attention as they excitedly move towards the lifts, others are panicked because they can’t find a parking spot, etc.. There are even fewer places to bail out and lots more “targets.” (Hint; in the IKON era you better get going early if you are driving to the Mountain—and even better to utilize public transportation .)

The local planners have talked about roundabouts in town. They pondered one at the intersection of Minaret and Forest Trail (the Village corner downhill from the Main Lodge). The local residents laughed. It would be a great place to watch drivers crash into each other. Like the bottom of Canyon Blvd. times 10. Now they are talking about one at the Meridian and Minaret intersection (where the flashing red lights seem to be working well). The problem with roundabouts and winter driving, especially with many inexperienced winter drivers, is that it is best to keep everybody moving forward in a relative straight line. Turns, and back and forth motions, are where drivers typically lose control in wintry conditions. How do roundabouts make sense in this environment? Maybe for the lobbyists of the body shop industry.

And ditching and abandoning cars during snow storms is another growing plague in Mammoth. For property owners and property managers it just makes snow removal more costly and aggravating. The last few days there has been a nice Porsche (probably a $100K car) in my parking lot, increasingly buried, blocking snow removal operations, with late night drunks walking by, cars and trucks sliding by, heavy equipment both public and private operating all around. In Mammoth this is pure irresponsibility, and stupidity. And the owner would probably blame someone else if there was a problem…..It appears that the new snow removal operator at the VONS parking lot is going back to the old days of handling this problem; bury the vehicle so deep it is impossible to shovel out. It is very easy to do in a loader. The owner’s choice is to wait until spring or pay the operator to clear you out. I’m ready for this to become a town-wide policy. Ahh, the good old days.

Oh and carry a shovel, it may keep you from having to abandon your vehicle. Most times they are just high-centered and it is an easy fix.

Thanks for reading! Please stay healthy.

** Closed sale data is compiled from in-house files and public records.