Mammoth Real Estate Sales Report – April 9, 2023

Spring Break And Warm Weather Give Mammoth A Much Needed Reprieve!

Market Summary –  March 26 to April 9 

The Mammoth Lakes MLS is reporting eight (8) real estate closings for the period ranging from a low of $355,000 to a high of $1,507,500. Of the eight (8) closings, seven (7) were financeable properties and four (4) were closed with financing. The closings included one (1) more vacant lot and two (2) homes in the ~$1.5M range. This time last year there were 20 closings in the period. 
The 10-year Treasury yield ended the period down slightly to 3.288%. The 30-year conventional mortgage rates bounced around during the period but are being quoted in the 6.25% range. Jumbo rates continue to be quoted slightly lower. The 10-year continues to be impacted by dollars flowing from bank deposits to Treasuries, but that appears to be slowing. This time last year the 10-year yield was 2.337%.


Condominium Inventory

At the period’s end the condominium inventory is up two (2) to 33. There were five (5) new condo listings in the period and one (1) has gone to escrow. There are now three (3) new listings at Forest Creek Condos raising questions about any “red flags”. In questioning the listing agents there doesn’t appear to be anything significant other than coincidence. Two of the new FC listings appear to be long-time residents looking to leave town. There are now 13 Westin Monache units on the market. This time last year there were 33 condos on the market.


Single-Family Home Inventory

The inventory of single-family homes is up three (3) to 12. The new listings are homes on the lower price spectrum and ironically all three are owner occupied. It looks like the big winter exodus is beginning. I have a Real Estate Q&A in the current issue of The Sheet covering this big winter real estate impact. This time last year there were 15 homes on the market.


Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is down another six (6) to 25 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down nine (9) to 36. The market remains stalled due to low inventory, slower visitor traffic, uneasy economic news, and…everything is buried in snow and Mammoth Lakes remains in a state of emergency. This time last year there were 64 and 91 pendings respectively.


Market Updates and News

For decades the winter of 1969 was legendary here in Mammoth. The theme was “I survived the winter of 1969.” But that was long

A somewhat subdued spring break period is in process and the warm weather this weekend is giving the Mammoth community a much needed break from the mayhem brought by the winter of 2023. And there is no snow in the 15-day forecast.

The April 1 snowpack numbers are in and the Mammoth region has far surpassed the record winters of 1969 and 1983, by almost 20%. The numbers for the entire Sierra are fascinating and can be found in a variety of places (here’s an interesting one). The Mammoth area is probably the most extreme location and deepest in the entire Sierra. It is no doubt why the community is in a state of exhaustion and why many people are claiming “inadequate response” from various service providers and government agencies. That is until they get clarity on the situation. 

A second major residential explosion completely destroyed a ~$4M home in Juniper Ridge (above Eagle Base) last Saturday. The fire and debris field were shockingly large. I witnessed it rather first hand. Thankfully there were no injuries. But the images put everyone on notice (again) of the potential ramifications of a propane leak. The Mammoth Lakes Fire Department, with other assistance, has run from reported propane leak to reported propane leak the whole period. MLFD has responded far in excess of adequate. Property owners have been reminded of clearing propane tanks, meters and service lines for months. But the volume of snow has simply overwhelmed almost everyone. Even the best property managers and property owners have lapsed. I’ve had past clients/second homeowners calling wanting to “change” their management during the period because of perceived inadequate responses. Good luck. I’m guessing some of these property managers will soon be relocating to warmer climates.

The Town continues to aggressively clear the streets utilizing a fleet of for-hire dump trucks and Town blowers and loaders. There were over 2,000 loads taken to the Forest Service snow pit during the period. Amazing. Nobody has ever seen so many dump trucks in town. With the weather changing from a nasty storm cycle to spring warming, property managers and owners are now focused on clearing roofs not only to avoid structural damage, but to also avoid roofs from accidentally unloading. Propane explosions are part of Mammoth’s past, but so are serious injuries (including death) from heavy roof loads just “cutting loose”. And as the weather warms, flooding of different sorts is inevitable. The spring skiing will be fantastic, and Mammoth should be busy. Mammoth is synonymous with spring skiing. Some may choose to wear their helmets even off the slopes. Respond accordingly.

A long-time L.A. Times reporter was in town this past week and interviewed dozens of people. His story appeared in this morning’s Sunday edition and I’d offer a link but it is behind a paywall. He had called my office a couple of times before his visit to town but he finally chased me down twice in my office (I’m pretty easy to find). I really appreciated his old-school journalism style (I told him that I had an outstanding journalism education in my teens). And asking questions of serious reporters is always fun. Interestingly, he said he came looking for one type of story and found something quite different. But he stuck with the story he intended to find; the fire and brimstone, and chaos currently in Mammoth. It was an interesting storyline for an Easter morning edition. He found the drama queen quotes he was looking for (not from me). I told him he could probably write 10 stories about of the current state of Mammoth Lakes.

Between his visits to my office, he interviewed the Town Manager. That resulted in his theory that the Town was responding inadequately to some of the people he had previously interviewed with structural damage to their homes (they are red-tagged with no occupancy allowed—and coincidentally are government subsidized housing). At the same time the Town was/is going to extraordinary efforts to clear streets in residential neighborhoods. The reporter’s implication was that the Town is protecting the properties of the wealthy while ignoring displaced local residents.

It was an interesting encounter. As a 20+ year public official on the property taxation side, I am acutely aware of real property tax revenues and how they fund government. But the Town of Mammoth Lakes is driven primarily by bed tax (TOT). If the Town is favoring their golden goose, they should be helping the condo projects with accessibility more than the residential neighborhoods. And I’ve also been warning property owners that the last thing they want in the current winter scenario is structural damage; the process of repairing it in Mammoth is ridiculously complicated—from obtaining a new set of engineered plans, getting them approved by the Town, to actually getting a contractor to finish the work. The scarcity of willing participants will alone cause long delays.

What this reporter experienced exemplifies the stress (and almost delirium) some in the community have based on this record winter. It is like nothing I have witnessed in my 42 winters. But this town has been through most of this before. Maybe it is a sign of the times. I reminded this reporter that Mammoth is not an easy place to live—the weather and climate, the lack of affordable housing, the “small town-ness”, the lack of stimulation and culture that some (many) people need, and much more. And as we learned decades ago, never let your gas tank go below half full, bad things could happen and you may want to leave town in a moment’s notice.

A classic example of “the Mammoth bargain” is currently the Mill St. neighborhood in the Old Mammoth district. I know it well. More than 20 years ago I owned a nice home on the lower portion. It is one of the true “rural” feeling locations in Mammoth. When I first moved there it was a private dirt road. My neighbors and I decided to spend the money and pave the lower portion of the road. The upper neighbors declined to participate, they liked the feel and didn’t want to spend the money. Eventually they did pave the upper portion, but they left many of the trees that still make snow removal difficult. For decades these neighbors have cherished the quaint location and privacy. They boast about it. Me, I’m long gone and now four homes removed.

But the winter of 2023 has changed all of this. The neighbors were in front of the Council recently begging the Town to take their private, substandard street over as publicly maintained and plowed. Some were almost hysterical. Add in some indignant letters to the editor. Of course, now it is all the Town’s fault and their response is inadequate. It has become a recurring theme. This winter has changed many people’s thinking.   

…Meanwhile, the Limelight contractors obviously want to get back to work and are they are aggressively clearing the site with even more dump trucks. They’ve learned how brutal Mammoth winters can be. But warm days can change things quickly.

And lastly,  The Wall Street Journal ran an article this past week headlined “Bosses Want Hard Workers—So They’re Hiring Older People”. Hmmm…..I wonder if Mammoth buyers and sellers believe this?

Noteworthy Sales 

The Aspen Creek 1 bedroom + loft / 1.25 bath closed for $620,000, cash purchase. The unit is still subject to the ~$50K special assessment for exterior improvements. Buyers (and brokers) are still scratching their heads whether this is a good buy or not.   

A 2 bedroom / 2 bath at Solstice closed for $900,000. These are nice lower level units sitting on a Sierra Star fairway. This has been the price range for these units in the past 18 months. But one similar unit closed in early March for $860,000. That seller may have left $$$ on the table. 

Favorite New Listing for the Period

This is a Coming Soon property, most likely by next weekend. This 3 bedroom / 3 bath home is on one of the best streets in the Mammoth Slopes between the Village and Canyon Lodge. A real neighborhood. Nice south facing views of the Sherwins. The home features an extra large (and tall) garage with tradesman features. Room for a potential Studio unit under the garage roof. The home has forced air heat and a wood burning stove in the great room. Pellet stove in garage. Original home is from 1969 and has “stood the test of time.” Replumbed with copper plumbing. Location, location, location.  

Probably listed at $999,000


Other Real Estate News 

It is a good time to look at what Airbnb and the STR industry have been up to lately. But before I go further, the one thing that I have recently emphasized to potential buyers as a real asset and bonus to STR ownership and operation in Mammoth is Mammoth Lakes Tourism. MLT is the marketing arm of the Town. The entity has had an interesting evolution since the late 1980s. Today they are controversially well-funded. Probably over funded. The Director, staff and Board are very experienced and perform at a high level. They market Mammoth to the extreme. They are especially focused on bringing visitors to town during the non-peak occupancy periods. All of this is a real added benefit to STR owners in Mammoth. Many STR buyers come to the market without this even on their radar. 

As far as the Airbnb stock, the prognosticators are all over the board, whether to buy or sell the stock, but that aside, a Motley Fool article from last week had some interesting input about the company and the future.

From the article, “The travel company’s platform-based business model is a thing of beauty. Airbnb connects more than 4 million hosts that have collectively served over 1 billion guests in locations across the world. Acting as an intermediary, Airbnb earns fees for bringing property owners and travelers together. It’s a profitable and highly scalable approach. It’s also capital-light, meaning Airbnb doesn’t need to incur much in the way of capital expenditures to expand its business. The costs of buying and maintaining properties are borne by the hosts.”

This reminds me of the original Intrawest condo hotel business model from the 1990s. Their theory was they build the properties, sell the units to individual owners and then they operate the “front desk” reservation company. The individual owners service the debt, pay the property tax, and pay HOA fees to operate the facility. Intrawest maintains “a long term cash flow position” in the front desk operation. A fact I have mentioned before, when Alterra purchased the publicly held Intrawest, the front desk operation at the Westin Monache was valued at $35 million. Airbnb has basically taken this business theory to an international level without the developement risk.

More from the article, “Airbnb can thus invest more in its brand and technology. It’s already working from a place of strength. Airbnb is often the first site people think of when they’re searching for short-term rentals. This leading consumer mindshare helps Airbnb attract more guests and gives it an edge over its lesser-known rivals. Moreover, hosts want to list their properties where the most potential guests will see them, while travelers want to peruse the largest selection of homes for rent. These dynamics naturally lead both groups to Airbnb — and in ever-growing numbers.”

The article states that Airbnb’s revenue and cash flow are surging. “Nights and experiences booked on Airbnb’s platform jumped 31% to 394 million in 2022. That drove a 40% increase in revenue to $8.4 billion and a 49% rise in free cash flow to $3.4 billion. In addition to the rising demand for housing rentals, Airbnb is benefiting from its cost-cutting initiatives. A COVID-19-driven plunge in travel during the early stages of the pandemic forced Airbnb to slash its expenses. The company emerged leaner, more profitable, and, in turn, stronger.

This more efficient cost structure should continue to bear fruit as Airbnb scales its operations. And thanks to the operating leverage inherent in Airbnb’s network-based business model, investors can expect its profit and free-cash-flow margins to improve further as it grows its revenue base over time.”

And from AirDNA, “In the short-term rental (STR) world, February is typically a tale of two months. On one hand, STR demand usually slows to its seasonal low point during the second month of the year. And on the other hand, February is historically one of the strongest months for new STR reservations as travelers begin to make their plans for the months ahead.

As far as these two big-picture trends go, February 2023 was true to form. However, within that predictability, the actual data around demand and booking activity is pleasantly surprising—especially given the air of economic uncertainty we’re all feeling as of late. STR guests tallied 12.9 million nights stayed in February. This marks the lowest level of STR demand since February 2022 but still represents an increase of 17.9% on a year-over-year (YOY) basis. This was up from 14% YOY in January and is equal to the average demand growth over the past 12 months.

For future stays, there were also 18.3 million nights booked throughout the month, an increase of 14.8% YOY. What does this mean in broader terms? In short, it’s a good sign for hosts, managers, and investors. After two months of healthy booking activity—a combined 39.6 million nights—the first half of 2023 is poised to be another solid year for STR demand at large.

At a Glance: Key U.S. STR Performance Metrics for February 2023:

  • RevPAR rose by 4% YOY to $182.82 million
  • Available listings reached 1.27 million, up 26.1% YOY
  • Total demand (nights) rose 17.9% YOY
  • Occupancy declined -1.8% YOY to 55.76%, +2.3% vs. 2019
  • Average daily rates (ADRs) rose 5.9% YOY to $327.90
  • Nights booked are up 14.8% YOY”

The Airbnb and STR industry look strong as we head to the summer of 2023. For the Mammoth region, the camping and backpacking crowd may have to utilize some of these properties too, at least in the early months. The snowpack is deep and dense in the Sierra. It will be nice to eventually see some dirt.   

Happy Easter and thanks for reading!

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

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