Mammoth Finally Warms, Tourism Stalled By Closures, And Construction Booms
Market Summary – June 18 to July 2
Condominium Inventory
Single-Family Home Inventory
Pending Transactions
Market Updates and News
Despite beautiful weather (finally), tourism was surprisingly slow this weekend. The 4th of July has always brought a big crowd to town but the lack of access to some of the visitor favorites like the Lakes Basin and Yosemite may be putting a damper on things. It is looking more and more like a “late” summer. I’m thinking we are bound to have summer and then snow on the ground in late September. The lighter crowds are reminiscent of the 1980s in Mammoth. So I would say enjoy it while you can. The entire region is the greenest I’ve ever seen it, so exploring in the lower elevations and more remote locations is a great idea. There are already spectacular displays of wildflowers. This should only get better.
I recently had to tell someone that this is “not the summer to be impatient.” It is now a phrase I am using quite a bit. And other people are using it too. The brutal winter just has everything discombobulated here in Mammoth. Just dealing with the damage and the mess from the extreme winter has delayed many things. Unresolved insurance claims have become the new nightmare and are causing incredible friction. Pools and spas took a beating too. There is lingering snow pack all over town. There are parts and materials delays too. Contractors are all super busy. Good luck getting on a roofing contractor’s schedule. But the major construction projects are forging ahead.
The outdoor dining and bar seating that evolved post-pandemic looks to be an entrenched feature of town, at least in summer. The Town resisted this for years, if not decades. Many believed it would make the town look trashy. I was always in support of it. I remember touring the village plaza areas of Whistler in 1995 with their then planning director Mike Vance. He explained to me at the time that the original plazas were planned too broadly and they were making efforts to tighten them up. Part of the plan was to allow most restaurants and bars to expand seating into the plaza which in turn created more animation and more viable businesses. It worked for them and it is working for Mammoth. That is until some Council members decide otherwise.
I opened an escrow this past week with an out-of-the-area escrow company. They immediately wanted to know if I use a transaction coordinator and what are their fees. Apparently this is something new (at least to me)—agents using transaction coordinators and charging their clients for it. In my opinion, this is outrageous. First of all, I detest transaction coordinators. Agents should be responsible for their files and paperwork—there can be devils in those details. Modern technology has made it all rather simple, and AI will make it even simpler. I see it as part of the agent’s fiduciary responsibility to their client. And if they are lazy on their files, they are bound to be lazy somewhere else in the process. And I also contend that an agent shouldn’t be able to utilize a transaction coordinator until they’ve been in the business for say, 10 years, or have closed 100 transactions. They need to know the documents. Relative beginners should never have a transaction coordinator.
Transaction coordinators take the responsibility for accumulating all of the paperwork necessary to make a “completed escrow file.” Some items are actually mandated by the Civil Code. Others are at the discretion of the supervising broker. Some of it is important, really important. Some of it is market specific. The majority of it is classic boilerplate that nobody ever reads. But agents pay these “TCs” in the range of $300-500 per transaction to complete their file so they can get their commission check. Some agents feel really important because they have a TC. But now it looks like it is in vogue to have one and actually charge the client for the service. Absurd. Principals should know when they are getting ripped-off.
A long-time local resident who lives adjacent to the old James Arness meadow in Old Mammoth told me she has been hearing frogs at night, for the first time ever. Frogs are the sign of a healthy ecosystem, so the winter of 2023 is doing some good for Mother Nature.
My Mammoth Real Estate Q&A column titled “The Hard Road NOT To Aspen” appeared in this week’s edition of The Sheet. So far, nobody has thrown a brick through my window.
Noteworthy Sales
A top floor 1 bedroom /1 baths view unit at Sunstone closed for $601,000. That’s $1,073 per square foot. Another big sale in the Sunstone project. This slopeside project was in the doldrums for years but now seems to be rising in popularity. And deservedly so.
The home at 95 Connell St closed for $1,035,000. This is a highly winter impacted location (I know, I’ve lived out there). I’m sure the winter of 2023 had nothing to do with the sale.
Favorite New Listings For the Period
This listing came to the market last weekend and is already in escrow. This listing attracted an impressive amount of interest and is telling about this segment of the market, and maybe the larger market. This is a classic late 1980s Hooper built fourplex, four 2 bedroom / 1 bath apartments and seven private garages. The units have side-by-side washer and dryer and free standing wood burning stoves. The property has some deferred maintenance and was priced accordingly. I fielded dozens of inquiries from prospective buyers and agents. From that, there are two types of buyers in this market. The first are investors looking for certain ROI (return on investment) meeting their “cap rate” criteria. These buyers are not likely to purchase this—comparable sales are high and expenses are high. In the current environment the yield on Treasuries is a serious competitor. Or maybe the demand is another sign people are looking to get their money out of banks and into real assets. Regardless, there was plenty of interest from these investors.
The second level of interest comes from prospective buyers who see special opportunity, or have simple need. The opportunity buyers see renovating the units, raising rents, trying different rental strategies including a mix of seasonal rentals, etc. Other opportunity buyers I spoke to were interested in maintaining a unit for their own usage, creating a mix of second home and investment property. The need buyers are local employers looking to secure housing for potential employees. The local Water District was even looking. On top of all of the interest, a good half stated that they are cash buyers.
Ultimately, the interest and action was incredibly strong. The property could have probably sold many times over, although the investor class was looking to pay less for the property than the opportunity or need buyers. It was an interesting test of the market.
Was listed at $1,099,000
Listed at $585,000
Other Real Estate News
I was in a Mono County Assessment Appeals meeting this past week and there were three taxpayers, each with different issues, and the cases were a great reminder of how property owners should (and shouldn’t ) handle their appeals/disputes with the Assessor’s office. And most of it comes down to simple communicationThe first was a Mammoth condominium owner who had purchased a modest property that was apparently in very dated (and poorly maintained) condition. This was his second time in front of the Board. The first time it was clear he simply failed to have productive dialog with the Assessor’s office. He had no experience in these matters but was in no way belligerent or indignant. Interestingly, this was not an open market transaction (no MLS or Zillow). It was a private sale from the seller to the buyer.
Between his first appearance months ago and this past week, this taxpayer and the Assessor’s office had come to an agreement on valuation which was significantly lower than the original assessed value. The appeal was moved to a “stipulation” of value and approved by the Board. In my opinion, this might have been a simple mistake by the Assessor’s office because there were no MLS photos to review to evaluate the condition of the property (over time, photographic records of properties have proven to be invaluable, especially today when they are time stamped). Here, the process worked when there was communication.
The second issue dealt with the timeliness of filing an appeal. These timelines are not arbitrary. They have been established by the California legislature and enforced by the State Board of Equalization via the various county’s Assessor’s office. Speaking for Mono County only, the Assessor’s office is very good at sending taxpayers notices about increased assessments, etc.. But it is human nature to throw these notifications on the pile of mail and procrastinate. That is a mistake. Making an appeal has a deadline and that falls under the watchful eye of the County Clerk and Recorder’s office. An appeal has to be determined as “timely” or not. If it isn’t timely, it can be denied.
This second agenda item was a specific case of waiting until the last minute, and again, not fully communicating with the Assessor’s office. Ultimately the board decided the appeal was in fact timely and the appeal will go to a hearing in the future. But again, this is probably a situation where the taxpayer and the Assessor’s office should be talking. Without actually hearing the circumstances, my experience is telling me that one of the parties is not grasping the facts around the valuation, and it may simply be procedural. Hopefully, the parties engage and a hearing is avoided (these hearings are expensive for the County and the parties on the public side work to try to minimize them).
The third case was classic taxpayer foolishness on several fronts; not listening (and understanding) and not paying attention, and then getting obnoxious. None of these will get you very far in this setting. First, the taxpayer’s appeal was simply not timely. Procrastination made it a couple of months late. But through the discussions (we tried to curtail what almost could have been construed as a hearing), it was obvious the taxpayer didn’t understand the “Prop. 8” aspects of California property taxation law.
Admittedly, California’s property tax laws are excessive. When I first got involved in all of this I was given the legal books which accumulated to about seven inches thick. I was told that attorneys who specialize in this body of law usually confine themselves to a couple of inches. Needless to say a layman couldn’t grasp it all.
But the Prop. 8 part of California property taxation is pretty easy to understand and the past 20 years have been a perfect period to study it. When real estate values take major declines like in the 2008-2013 timeframe, this law allows (compels) the Assessor to reduce assessed values. It can be a major, and challenging, task for the Assessor’s office to keep up with it. Here in Mammoth there were serious lags. During that period I helped many clients get reduced assessed values (and lower property tax bills).
But when the market rebounds, and especially like it did in the past few years, the assessed values that fell into this “Prop. 8 reduction” are allowed to be increased far beyond the mandated 2% cap. It all has to do with the original tax basis. In this case, the taxpayer purchased in 2005 at what was close to peak values during that market cycle. As values declined, his assessed value dropped. But now he was contesting the rapid increase in his assessed value and claiming the Assessor could only make 2% increases. It appeared he simply wouldn’t listen to the concept of the Prop. 8 reduction and subsequent increases (and he is obviously not a reader of my newsletter or blog). His appeal was determined to be untimely, and my guess is that he would fail in a hearing anyway.
Then he did what should be avoided. He started making rants and accusations including “I’m going to sue.” Yeah, sure you are. Your disputed amount would be a small fraction of an attorney’s retainer and any reasonable attorney would look at the case and give him the proper advice that he is incorrect. And almost to the point of entertainment, this meeting was held over Zoom and you could hear his wife in the background prompting him to argue with the Board. I guess this is the modern state of society. It isn’t a good look, not for any sort of meeting or hearing.
Maybe these property owners will just be so pissed off that they decide to sell their Mammoth property. We could use the inventory.
Happy 4th of July!
Thanks for reading!