Mammoth Real Estate Sales Report – August 13, 2023

Cooler, Wet Weather—A Precursor to Another Big Winter?

Market Summary – July 30 to August 13

The Mammoth Lakes MLS is reporting 10 real estate closings for the period ranging from a low of $440,000 to a high of $1,525,000. Of the 10 closings, nine (9) were financeable properties and seven (7) were closed with financing. The three (3) highest sales were Snowcreek (Lodges and Creekhouse) properties over $1.4M. There was one more sale of a vacant lot in The Bluffs. The low sale was an odd, first floor Studio unit at the Westin Monache. This un-standard floor plan is located opposite the meeting rooms and featured high ceilings and no fireplace.

The 10-year Treasury yield rose significantly and ended the period up to 4.168%. Mortgage rates rose equally and are now being quoted in the 7.20% range. So much for lower rates, at least for now. The 1-month to 1-year Treasury yields remain stuck in the mid 5% range.

Condominium Inventory

At the period’s end the condominium inventory is up nine (9) to 55. There were 19 new listings in the period and four (4)) have already gone to escrow. For years I’ve been explaining to prospective buyers that the condo inventory historically peaks right around Labor Day weekend—many sellers like their properties to come on the market in the summer when the weather is great and the projects look nice and tidy. The fall selling season (“the anticipation of winter”) then reduces the inventory. This timing typically makes August the best time of year to shop for Mammoth condos. So here we are. But almost laughingly, we also simultaneously experiencing “the dog days of summer” (see below).

Single-Family Home Inventory

The inventory of single-family homes is down one (1) to 24. Only one (1) of these listings is to-be-built. In the ~$3-4M price range, where there are some very attractive offerings, the one I find the least desirable is the one that actually went to escrow in the period. Mammoth can be a funny market….

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is up one (1) to 64 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 11 to 96. The Dog Days of summer are upon us. It happens every year and is so predictable. Two or three months from now I will get calls from prospective buyers saying “that was on the market?” It happens every year. Yeah, it came on the market when you and the family were on summer vacation. You know, that last gasp before the kids go back to school. Once they are back in school and football is on the TV and the IKON passes show up in the mail, their focus returns to Mammoth. It happens every year like the aspens turn from green to yellow.

Market Updates and News

The Farmer’s Almanac is out with their winter 2024 predictions and much to the chagrin of many Mammoth local residents they are calling for a, more or less, repeat of 2023. Cool temperatures this weekend and in the near forecast make the prospect seem even more viable. We’ve barely had five weeks of warm, summer-like weather. There was a hail storm Friday afternoon that covered my parking lot in white. At least we have been smoke free. The prediction that a good deal of last winter’s damage will eventually be buried in snow is likely to come true. Especially as insurance companies dawdle along with claims. Another drought might become the preferred weather pattern just so the community can get straightened out.

Last weekend’s Bluesapalozza crowd was large, as expected, but certainly not overwhelming like the past two years. Mammoth has had a quiet summer so far, and I explore this further down below in my Other section. This weekend’s Margarita Fest continues to be a hit. One of Mammoth’s old-time characters used to refer to good tequila (he liked Don Julio reposado) as “medicine.” The world sure needs it. It probably helped Mammoth the last couple of days.

California Senate Bill 584, aka Laborforce housing: Short-Term Rental Tax Law, has gone nowhere in the Assembly. But Sacramento is hot this time of year. Or maybe the industry killed it. Airbnb now has a $85 billion market cap, they could certainly buy off a few politicians. The word is they come cheap these days.

I spoke with the Director of Sales at the Limelight (she actually came to my open house) and the completion is expected in two years. Interest continues to be strong and they have a digital 3-D tour of the hotel and property that can be seen in their sales office. They still won’t be taking any reservations—clearly they are just building enthusiasm for the property, and hopefully demand. I asked her about the prospective buyer profile; are they looking for a luxury STR? Are they looking for a pure second home? Or? She said it is split about equally. Many are focused on a luxury condominium that is brand new. She also said one interested buyer wants to make it their permanent residence so “their children would develop better social skills by interacting with the hotel guests.”…Now that is an interesting twist on condo hotel life.

The non-operation of the Snowcreek golf course this summer is evolving into its own melodrama of sorts. It might just be the start. The Sheet ran some dopey comments from the owner, developer Chadmar Group. But there is a bigger “play” happening (and who is getting played?). There is a letter this week in The Sheet suggesting the Town should make it a municipal course (which has already been discussed here). The Town also has a stream of recreation funding from Measures R and U that could support a bond to build the back 10. The Council and Parks & Rec. people have enough ego to think they should pull it off (perhaps they need to get the ice rink open first??).

Meanwhile, it is pretty common knowledge that Chadmar doesn’t want to develop the final phase (8) of Snowcreek. The Town hasn’t been great negotiators in the past, so Chadmar’s thinking may be that in the excitement for securing the future golf course (another grand feather in their cap!) they will actually give up something they don’t have to. This could include development rights or other potential exactions/extractions. Or maybe Chadmar thinks they are dumb enough to actually pay for the back 10 land? Or who knows? It may become a classic real estate negotiation—get the buyer motivated and salivating (including political pressure from the public), then get them to do something foolish. “Never be afraid to walk away” is great advice in negotiating. And understanding who has the position of strength….This might be fun to watch, or painful.

Noteworthy Sales

A “modernized” 1 bedroom / 1 bath at Mtn. Shadows closed for $560,000 or $785 per square foot. The unit was very clean and had all of the hip color and decor choices, but still had the original (50 year-old) kitchen cabinets and aluminum sliders. The market still loves flashy properties.

Favorite New Listings For the Period

This is a 2 bedroom + loft / 2 bath Woodlands townhome has remodeled kitchen and baths, is in rental-ready “turn-key” condition, has sunny Sherwin views and the upper deck overlooks the green on the 12th hole of the Sierra Star golf course. Project has a nice pool and spa area. Easy access to the Red Line shuttle for trips to downtown, the Village or Main Lodge. Stack washer/dryer. Check out the video tour.

Listed at $900,000

Other Real Estate News

The “weird” summer of 2023 got off to a slow start due to the record winter, prolonged cold weather, and the delayed opening of popular local attractions. But it has now become quite apparent that local tourism is down, and probably down significantly, especially compared to the last three summers of crazy tourism business. But there are mixed messages.

(In addition to everything else, I have a personal, empirical barometer of tourism—my two commercial neighbors are the reservation company Grand Welcome and the popular Mammoth Tavern restaurant and bar. I am very cognizant of their business activity. Many of Grand Welcome’s customers come in my door mistakingly looking for their keys. I also see their staff coming and going all day to service their units. They are clearly on the slow side the past few weeks. And Mammoth Tavern’s traffic has slowed too. Normally (the last 10 years), there is a rush of customers between 4 and 5:00pm (happy hour) and late comers beyond 5:30 rarely find a table. The past six weekends there were tables available at any time. Very strange for them.)

But last Friday, the long-time produce manager at VONS told me that his numbers have been “off the hook” in the last few weeks. His take was that his customers were taking food back to the campgrounds and RVs to make their own meals. Pre-packaged and ready to eat items are hot sellers.

So has inflation, the end of pandemic-related “easy” money, and the end of low interest rates all put a major dent in tourism and/or Mammoth tourism?

Without real looking-back statistics like TOT and sales tax reporting, we can only rely on anecdotal evidence. There are admittedly even mixed signals on the macro level. Some of my clients who have STR properties in other, and more summer-oriented locations, are reporting lower demand. My personal favorite vacation experience has defined, limited availability, but has far more openings in the summer and fall of 2023 than in the past five years. Good for me, but not for the industry.

And AirDNA is not indicating any apparent drop-off both nationally or locally, yet. In fact, they are currently reporting that international travel is up significantly (maybe they are all going to Paris instead of Mammoth?). In Mammoth, AirDNA is reporting 3,148 active rentals with an average occupancy rate of 57%. The average daily rate for August is $284.

I’ve also been over in June Lake a number of times recently and it is busy over there. The condos I’ve been trying to show over there are mostly back-to-back rentals. Reports from Lake Tahoe continue to relay massive crowds and unbelievable gridlock on the roads (and Burning Man is coming to the region). And one recent Sunday I traveled to Bishop and I swear there were more cars on Highway 395, going in both directions, than I’ve ever seen. The U.S. Travel Association is reporting that total travel spending in July was up 0.9% from June and was up 4.7% for the year. And air travel demand increased 12% in June (2023) YOY.

The decline in Mammoth business this summer raises many questions. Since this is a real estate focused newsletter and blog, the most immediate question is; How will this decline in tourism flow impact the STR owners? The answer is very individualistic. It may play fine with the quality-not-quantity owners. Winter is still prime time and summer is the gravy. Solid (and aggressive) STR operators are still going to get their bookings. The rest may not care. Others may experience (and be happy with) less revenue and less wear-and-tear. And for some, there may be more prime time for their “maintenance” stays.

Another question; Is the current solution to our housing problem just less tourism?—less demand for housekeepers, waiters and waitresses, cooks, retail store employees, etc.. Economic down cycles have always created less demand for housing in Mammoth. The high tourist demand of the past three summers clearly worsened the workforce housing problem.

And what about the work-from-home (WFH) trend on housing? An increasing amount of employees are now having to go back to the office at least a couple days of the week. There have been plenty of new Mammoth residents (especially since the pandemic) who are WFH participants. Many true, confident WFHers have actually purchased properties (I’ve represented some). Others are more transient in nature and have pushed the current rental demand to extreme levels, and rents skyward. It is impossible for the average local workers to compete with these higher-wage WFH employees. But if they have to go back to an office, this trend may be changing too.

And then there is the question whether Mammoth Lakes Tourism (MLT), and their massive budget, were truly effective at bringing all of these tourists here the last few years? Or was it just a macro trend of post-lockdown escapism (now being called “revenge travel”) and lots of unearned disposable income in people’s pockets? It now appears MLT will really have to prove themselves if this tourism slowdown continues (it will probably justify them asking for more money). But these expenditures have been contentious in the recent past. The Town may be heading towards finding some new reality. It will be fun to see what they blame the apparent slow down on.

If this trend continues we may look back at the strong tourism levels of last fall as “peak tourism.” The winter was too deranged to really know what the demand was. And if Alterra was a public company we might be able to find out if we have also hit peak IKON. We’ll just have to wait for winter to know for sure.

Meanwhile, the lower tourism numbers make the Mammoth region an even more desirable place to be. The Lakes Basin and trailheads can still be busy, but the off hours are good. Maybe many old-time Mammoth fans will come back now that things have changed. Reminds me of the old Yogi Berra saying “No one goes there nowadays, it’s too crowded.”

Thanks for reading!

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