Mammoth Real Estate Sales Report – June 18, 2023

Mammoth’s “Weird” Summer Begins, Will It Ever Get Warm? Will The Visitors Come?

Market Summary –  May 21 to June 18 

This report is for the past four weeks. The Mammoth Lakes MLS is reporting a whopping 28 real estate closings for the period ranging from a low of $460,000 to a high of $2,240,000. Of the 28 closings, essentially all were financeable properties and 15 were closed with financing. The large volume of cash purchases was clearly (and the files prove it) a movement of people wanting to get their money out of banks and into something tangible. The closings included two (2) sales each of 2 bedroom units in the Village, units at Forest Creek, Creekhouse, and three (3) Snowcreek IV townhomes. There were 12 condominium closings between $460,000 and $700,000. Two (2) low-end home closings.
The 10-year Treasury yield surged upward during the period down to 3.769%. The lending industry has held the line on mortgage rates to right around 7%. The industry was watching two key signals this past week; the CPI data and the pause by the Federal Reserve. Jumbo loans are still being quoted less. The newest financing glitch in the Mammoth real estate market is local HOAs with open insurance claims resulting from the past winter. Lenders won’t certify the HOAs with these claims open. And the insurance companies appear to be dragging their feet on some of the claims while others aren’t in position to fully assess the claim damage. It will sort itself out but will certainly impact some transactions this summer and fall. Buyer and sellers beware. 

Condominium Inventory

At the period’s end the condominium inventory is up 12 to 40. There were a total of 30 new condo listings in the period and nine (9) have already gone to escrow. Buyers are finally seeing some good inventory to look at and consider. I’m expecting this trend to continue and how fast these new listings sell will be a strong indicator of the market. Some of the new listings are identified as move-up buyers in the Mammoth market. So far the brutal winter of 2023 and the associated damage and special assessments don’t appear to be driving condo owners out of the market. 


Single-Family Home Inventory

The inventory of single-family homes is up five (5) to 16 but two are to-be-built offerings. There now only are only four (4) homes on the market under $1.375K. Quality new listings are bound to be pounced on.


Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is up five (5) to 42 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 10 to 64. The statistics speak for themselves. The closings during the period are impressive to the point that sale prices were not discounted to any significance, and maybe to the contrary. There is strong price support in the market for quality properties.


Market Updates and News

The year 2023 will certainly be a year to remember in the Mammoth region. The surprises of the summer and fall are yet to be experienced, but so far these are strange days. The areas that are not still under snowpack are turning spectacularly green, and colorful with assorted blooming. It should be a photo-op summer and fall. There are areas of incredible inundation too, and the weather has been abysmally cool. This weekend was pleasant but the high temperatures this next week are forecasted barely above 60 degrees. It all feels a little weird.

There are oddities everywhere. The summer is just kicking off and there is no sign of the normally ubiquitous Mammoth Motocross crowd. The snowpack has the event postponed until the Labor Day weekend period and that alone is bound to be disruptive in some way (will they even come?). Dave McCoy was a motocross guy and the event has a long history in Mammoth. It brings almost two weeks of solid tourism to town; they bring lots of toys and logo wear, are somewhat youthful, and always a little loud. They (it is very family oriented) come to have fun and they jumpstart the economic engine of Mammoth summer. Years ago the new owners of Mammoth Mountain and some of the town fathers questioned the continuance of the event.  The local merchants let them know differently. For STR owners it also provides valuable early summer bookings, usually for longer than normal stays.

Meanwhile, outside of a decent crowd ushered up to the Main Lodge for spring skiing, the town is quite dead for this time of year. Hopefully the 4th of July period and warmer weather gets it going. A manager a VONS told me that June was “off 20%” and that he would have to working the check stands if things didn’t change. Maybe it is all going to stack up to a late summer and spectacular fall. Don’t forget your down jackets. Other weirdness; groups of early JMT and PCT hikers are actually hiking on Hwy. 395. They really have no other option. The Trails are buried in snow (how lost could you get?). What a difference a year makes.

Mammoth is now a Tale of Two Golf courses. Sierra Star opened Friday. It doesn’t look perfect but it looks very playable. Now that water is plentiful I’m sure they will be making enhancements all summer. They seem to be on it. I often wonder what Cal Olson would think of his golf course some 30 years later. I always remember his vision that the trees along each fairway would “frame” one of Mammoth’s unique geographic features. Cutting down 6,000 trees created lots of frames.

Snowcreek golf course on the other hand has become a local mystery. Maybe the mystery helps sell condos? Nobody knows for sure if it will open this summer, or ever again. Admittedly the course is soaked (it is a meadow after all, in the wettest year imaginable). Maintenance doesn’t seem to be a priority. Since the Mammoth rumor mill is already in full swing, I’ll take my shot. The course is a serious financial black hole for 2-3 months of annual play. The Town is flush with recreational dollars and they love spending the money and the prestige of owning amenities (see the Ice Rink). So why not try to dish it off and let them turn it into a municipal course. They can even dream about developing the back 10. Maybe horse trade it all for some fantastic added development bonuses in Phase 8….hmmm, sounds like real estate developer thinking. But it could be best for the community. The Town’s cross country ski trails could be expanded out there.

But back to reality, repairs and general construction throughout town are in full swing. The Sierra Nevada Inn renovation project could shape up quickly. The final building modules have been delivered onsite and should go together quickly. The hardscape and landscape is sure to follow and the balance of the new design should come together. It will be a totally different look for the legacy Old Mammoth Road property—Silicon Valleyionized. The old Rafters is now open as the Sierra Bar. The new complex should become an attractive entertainment location. This will be a huge transformation for this micro-neighborhood in Mammoth…. The Limelight and The Parcel sites are bustling too. The Ice Rink developments are shrouded under a tent, so who know what is really going on in there? They are now saying completion will be in early August….. There is no action on the Village/Berner parcel so the rumors of that construction start were just rumors. Construction cost inflation is bound to stymie many projects. It’s actually impressive that there is this much going on.

Last week the Town Council finally passed/continued the much contested TBID tax for another five years. Despite all of the local debate and criticism, this is no surprise. For Mammoth visitors it is classic “taxation without representation.” The upcoming 4th of July will mark the anniversary of me being yelled at by a Town Councilman for implying in a real estate column that the TBID tax was Rusty Gregory’s contrivance for back filling the new debt caused by the Airport litigation. In reality, the TBID, on top of TOT, has made the Town so wealthy it can be sloppy with its finances. Or build ice rinks and golf courses.

The FEMA/Disaster Assistance people are still in Mammoth. They were originally scheduled to be gone by the end of May, then by the 5th of June. Maybe they are liking Mammoth. The two armed guards at the entrance were a bit much. And they didn’t seem to have much to offer the average Mammoth property owner (it appeared you needed to be impoverished to qualify). It will be interesting to see who really got some sort of assistance from the various government programs. BTW, the dictionary definition of boondoggle is “work or activity that is wasteful or pointless but gives the appearance of having value.” But I’ll remain open minded.

The opening of Yosemite is also a great uncertainty. Even when the crews can get the snowpack cleared from the roads there are concerns for wet snow avalanches, flooding, fast moving water, fallen trees, falling rocks and an assortment of other life threatening calamities. The bears are sure to be hungry too. There is other weirdness I’m sure.

Noteworthy Sales 

A 3 bedroom /2 bath condo hotel unit at Sunstone closed for $1,555,000. Wow. But this is right on the ski run at Eagle Base. That is $1,130 per square foot with no real significant upgrades. Impressive. Close to, if not an all-time high price per square foot in Mammoth.

The home at 17 Pinehurst closed for $1,300,000. This same home closed just before Covid for $710,000. These sellers made some upgrades including a new roof, but this is strong price support in the single-family market.    

The popular 3 bedroom / 3 bath, 1-car garage floor plan in Snowcreek V closed for $1,175,000. More incredible price support.

And a very nicely remodeled Studio + loft / 2 bath at Mountain Shadows closed for $555,000. This is a great, efficient little upstairs floor plan. When I started in the business they sold for around $50K and we called them “bread and butter” deals.

Favorite New Listings For the Period

This finally came to the market just before I left on vacation and it is still available. This is located on aptly named Ridgecrest Drive between the Village and Canyon Lodge. A total of 3 bedrooms and 3 baths with a large garage/workshop, large mudroom and laundry room, fenced yard and more. Check out the video tour.   

Listed at $1,050,000
And this is coming to the market on July 1. This 1 bedroom + loft (actually 2 bedrooms) plus bonus loft / 2 bath townhome at Sierra Park Villas has some valuable “grandfathered” features—the bonus loft and a shower in the downstairs bath. Three decks and nobody above you or nobody below you. These make great STR unit because of the central, Old  Mammoth Road location and utility. Nice pool and spa area. Free standing wood stove.
Listed at $610,000 


Other Real Estate News 

The short term rental side of the real estate world continues to be in “wild west” mode.  While Mammoth continues feel like an ice box, the travel and STR industry is expecting a big summer of business, but with changing dynamics. It is becoming a tug-of-war between the cost and hassle of flying and the inflated costs of driving. Regardless, it looks like Memorial Day Weekend set records for all sorts of traveling. 

The travel media enterprise Skift reported this last week that “strong economic fundamentals and continued enthusiasm for travel have raised the demand growth forecast for 2023 to 10.4 percent year-on-year, up from 5.5 percent.” They expect demand will sustain into 2024 at a rate of 8.5 percent.

The STR industry observers also toil with analyzing the supply and occupancy rates. It isn’t like building a 250 room hotel and having 250 rooms of constant, available supply. STR properties get bought and sold and placed or displaced from the market. Here in Mammoth, properties come and go seasonally; some owners only rent during certain times of the year while using it extensively during the other times. The recent Skift report notes that rising mortgage rates continue to slow the overall supply growth. But lower house prices in some markets are helping add to the supply. Overall, the industry says the global STR supply is stabilizing after a few years of solid growth.

Interestingly, the current AirDNA “market grade “ for Mammoth Lakes has changed slightly in the past few months. For years Mammoth’s grade was B—. It recent moved to a B grade. Quoted occupancy rates sat at 54% for years but are now at 55%. The number of active rentals is also up by approximately 150 from two years ago. The average daily rate is $335 per night. Rental growth for 2023 Q1 was up 2% YOY. The market grade assessment has the Mammoth market as highly seasonal (probably its biggest downfall), but with better than average rental demand and revenue growth. The local market remains highly ranked in the “regulation” department due to the long-standing zoning regulations pertaining to STR, and the Town’s Quality of Life regulations established for STRs as the Airbnb craze exploded some years ago. The investability score remains just average; as I often point out, the “usability” factor remains as a key factor for owning a Mammoth STR.   

The largest number of available units in Mammoth remains 2 bedroom units, the least available are 5 bedrooms or more. The AirDNA data show that in February of 2023, units of 5 bedrooms or more averaged $28,600 in revenue, 4 bedroom units averaged $15,700, 3 bedroom units averaged $11,000, 2 bedroom units averaged $8,200, and 1 bedroom units averaged $5,800. This is interesting data but last February is a tricky month to look at—Mammoth had plenty of snow but the weather was impacting access to town and access to the majority of the Ski Area. 

Other high points from AirDNA about the industry; “while March saw the highest number of nights booked ever in the STR industry, April saw booking growth rates spring up to 16.4% YOY, up from 10.4% in March. Heightened booking combined with pacing that has been ahead of previous years are strong indicators that the 2023 summer travel season will be the biggest yet for the STR market.” (In Mammoth, that may depend on if it ever warms up before it snows again.)  So overall, demand is up, supply is stable.

Also, in response to jittery economic conditions, “Nevertheless, guests are likely turning more focus to value and affordability in the face of possible recession, as ADRs grew just a tiny 1.4% year over year in April. ADR growth declined from March to April for all location types except Mountain/Lake Resorts, which accelerated from a near standstill of 0.6% in March to 1.3% in April. This put ADR growth in each location below the inflation rate except in Small Town/Rural locations.”

And lastly, Reuters is reporting “U.S. company HomeExchange said membership levels in the first quarter increased 77% year over year to 110,000 and exchanges increased 63%.” This is an increasing insight for new Mammoth STR owners—this area remains desirable for home swapping, especially for winter usage. The “quality not quantity” owners may find swapping time in their Mammoth property for time in interesting, far-away places as a real added bonus.

Meanwhile, the hullabaloo over the recent California Laborforce Housing Financing Act passed in the State Senate earlier this month is still questionable. The Bill has been moved to the Assembly and the current status is “held at desk.” The Act would add a 15% tax to all STR rentals to help fund affordable and workforce housing projects in the State. There really isn’t much new information about the future prospects of the Act in the Assembly, but my guess is that they are looking into the legalities, and to see if there are any lobbying interest against the proposed Act. We’ll see.

Some of the Bill’s proponents are of the same delusional thinking that we have seen in the past—that making STR operations more difficult and expensive for owners will ultimately turn STRs into long term rental opportunities. Nobody has any data to prove that. I haven’t fully wrapped my head around the ramifications of the proposed Act, but it could actually create a win-win for this community—a larger push towards quality-not-quantity STR operations and more dollars for workforce housing projects. On the other hand, the growing advantage of renting condo STR properties is the ability to easily have meals and food in-house to offset the escalating cost of take-out and restaurant food. A new 15% tax NOT levied on motels and hotels could offset the cost of burgers and pizza, so maybe it becomes stay at Motel 6 and get sushi to go. It’s fun to ponder the unintended consequences of government making things “better.”

Thanks for reading!

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

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