This Mammoth Real Estate Q&A appears in the Memorial Day Weekend 2023 issue of The Sheet.
Q: Now that we have a little distance from the big winter of 2023, what are the important take-aways on the real estate side so far? Which properties appeared to survive the best? Any surprises?
A: Warmer weather and significant snow melt has brought some level of calm to the region. The chaos, and the near war-zone-like threats to life and limb, as reported by the L.A. Times, have subsided. But much of the big mess still needs to be cleaned-up. Some of the repairs may not happen until the snow flies again. Hopefully the region is rewarded with a fabulous, water-filled summer and fall. And everybody has their stories, and a phone full of incredible photos of conditions we hope to never to see again.
The total damage is still unknown, that includes damage to structures, the environment, and the financial damage. There is other damage, and for some, there is emotional damage. I’m oddly curious to see what the bed tax and sales tax numbers end-up looking like. And how much the Town spent on hauling snow. As the snow pack continues to melt there will certainly be new surprises.
For those who missed the winter of 2023, it was a combination of record snow, some 15 to 20% bigger then the “biggest” winters of past, but also a very cold and windy winter. By late January I was referring to this winter as being a “stress test.” And it was becoming that for a community with a long history of enduring brutal winters. There were many extended stretches of days where the temperatures did not come above freezing. That can wreak havoc on things. The vicious winds deposited large volumes of snow in precarious ways on roofs. The irregular and extreme deposition of snow (and ice) on roofs created a property management nightmare. The winds created what appeared to be almost day-long whiteout conditions, and massive wind drifts formed all over the place including roads and highways.
All-in-all the local property management companies and teams did a fantastic job handling the variety of extreme conditions. Some visitors came with unrealistic expectations (I reported that “this isn’t Club Med” at the peak of the challenges). Many were told to simply stay away. Others expected epic powder runs when the lifts were barely running. But all resort towns have to deal with clueless and demanding visitors. At one point I considered offering a concierge service for guests; I could be helpful in finding their totally buried condo accommodations. Google Maps probably saved the industry. Many guests arrived to a few feet of snow in the walkway to the front door.
From the real estate perspective there are many lessons from the winter of 2023. The first is probably the value of good and reliable property managers and snow removal operators. As the stress test winter proceeded I was advising my clients to do anything to avoid structural damage to their properties. Plenty of judgement calls had to be made. While the dollar expense to have roofs cleared of excessive snow became nearly obscene, the total cost of structural damage is even crazier. The process of (re)engineering, new Town approvals, and reconstruction is insane. Especially here in Mammoth where everything moves slower and demand outstrips supply. And winter can come fast again. The best contractors are building new (luxury) homes. The thought of taking a structure apart and putting it back together isn’t very appealing.
Snow removal and especially snow storage got pushed to the extreme. The parades of dump trucks in town for weeks and weeks was really something never seen before here in Mammoth. I heard they developed an almost cult-like following. The single-family homes in the higher elevations had driveway walls almost as high as a two story house. The HOAs and condo projects faced a variety of challenges, mostly dependent on how much snow storage they inherently have. Some were able to ramp snow into every available space. Others were paralyzed and needed immediate trucking of the excess snow. And snow being removed from roofs only had to be dealt with again, pushed or trucked.
All of this extreme snow management launched expenses into the stratosphere. The 30-40% more snow (than “normal”) sent HOA snow removal expenses into the 300-700% range of the original budgets. It isn’t because the budgets were wrong. It is simply the compounding effect of all the extra snow. HOA budgets simply can’t anticipate this type of event and overspending. The California Civil Code allows HOAs to make large emergency assessments. And we were in a declared federal state of emergency. The FEMA people are still here.
All of this added expense forced some HOAs to make immediate assessments because of significant cash shortfalls. Others could borrow from reserves until they calculated the sum total of the financial impact. Some HOAs needed immediate infusions of cash from their owners, and others have the luxury of collecting the fees over time. Unfortunately, the “problem” just melts away. Sadly, those surplus dollars could have been used for capital maintenance or improvement projects. But this is part of the Mammoth “bargain.”
During the peak of the state of emergency many structures were yellow or red tagged allowing limited or no occupancy. These were primarily due to structural and safety concerns caused by heavy snow loads or suspected propane leaks. Today, many have been inspected by engineers and released from any occupancy restrictions and/or required to make any significant repairs. Some second homeowners whose homes are red tagged due to suspected propane leaks are simply waiting for all of the snow to melt before making sure their properties are safe for occupancy. Their propane and water have been shut off to prohibit any explosions or flooding. I have at least one client in this scenario.
Propane, once again, proved to be troublesome in heavy winter conditions. It is part of Mammoth’s history and property owners are once again reminded that they should do everything to take all necessary precautions to safeguard it. The overall safety features have improved dramatically over the decades, but some of the problems are almost inexplicable. And when people are consumed by so many other immediate things, other safety measures can be overlooked. Mammoth was lucky to have help from outside fire agencies during this period. I’m sure many property owners will be reviewing the integrity of their propane based systems this summer. Explosions are the worst form of structural damage.
What else have we learned, or are learning? Mammoth has never been a heavy insurance claim area. Many may find that hard to believe because of the “volcanic eruption” of the early 1980s, and all of the earthquakes over the years. But the winter of 2023 will be known for insurance claims and there will be lessons learned. Some claims have already been settled. Some are being denied and appealed. Some property owners are hiring attorneys. But many more are open and awaiting final disposition. The lingering snowpack doesn’t help. Insurance adjusters are frequenting town. Mammoth was already experiencing insurance premium challenges based on disasters in other areas. Hopefully, the declared emergency status will keep these problems at bay.
This past winter really amplified the responsibility factor of real estate here in Mammoth, and beyond just the actual dollar expense. Owning real estate has always been a significant responsibility. In these extreme conditions, even more so. Properties need to be attended too and require frequent assessment. It became overwhelming for most. The ownership/management responsibility between single-family and condominium ownership has always been a discussion and consideration with potential buyers of real estate here in Mammoth. The differences became quite apparent this past winter.
Based on some recent inventory moves, it looks like some single-family owners are already looking to sell their properties and purchase a condominium. It happened to me in the past. The winters of 2010 and 2011 did it to me. It will be interesting to watch the inventory through the summer to see if this is a real trend. And potential buyers who have been looking at the Mammoth market in the recent past may change their preferences from wanting a single-family home to wanting a condominium. Condominiums make a lot of sense for second homeowners. Of course, after a couple of drought years it will all be forgotten.
And lastly, big winters always motivate some local residents to say “enough.” This winter will be no different. I know many long-time local residents who are now planning, or are carrying out their plans, not to be in Mammoth during most of the winter in the future. Or for only the 3-4 warm months. But this is nothing new either. And the added costs (special assessments) and hassles as a result of this winter may shake-out additional condo owners and create sellers. The current real estate market that is still short of supply would certainly welcome it.
On the flip side, it looks like the big winter of 2023 hasn’t turned-off those looking to purchase real estate in the Mammoth region. In fact, it looks like all of the snow has the interest and excitement level pushed to a high level. And a beautiful summer and fall should only reinforce it. So far, the year 2023 is certainly memorable. Hopefully the second half is more fun.
Here’s to remembering what Memorial Day Weekend is all about!