Mammoth Real Estate Sales Report – November 12, 2023

Mammoth Mountain Opens And More Town/Real Estate Owner Conflicts! 

Market Summary –  October 29 to November 12 

The Mammoth Lakes MLS is reporting 18 real estate closings for the period ranging from a low of $320,000 to a high of $4,200,000. Of the 18 closings, 16 were financeable properties and eight (8) were closed with conventional financing. The five (5) highest sales ranging from $1,030,000 to $4.2M were all cash purchases. The two (2) lowest sales were vacant single-family lots. There were seven (7) condo closings between $500-700,000. 
The 10-year Treasury yield moved downward during the period to 4.628%. The mortgage industry said “rates had a good week.” The 30-year conventional rate was being quoted at just under 7.6%. I found one of my old Market Update and Best Buy lists from the summer of 1989. It stated that there was a new window of opportunity for investors because of more favorable interest (mortgage) rates. “Current fixed rates for 30-year mortgages are right in the 10 percent range with some programs actually in the high 9 percent range.”  Always nice to get a historical perspective. I’m currently seeing most financed buyers putting at least 40-50% down. 

Condominium Inventory

At the period’s end the condominium inventory is up three (3) to 65.  There were 12 new condo listings in the period and one (1) has already gone to escrow. One brand new listing is a Creekhouse property adjacent to the new proposed cell tower at fire station #2 (see below). Ten of the new 12 listings are in the RMF-2 zone. Interesting. A handful of these new listings are long time/legacy owners according to the tax roll. Most often, these type of properties are held even longer looking towards utilizing the stepped-up basis taxation rules.


Single-Family Home Inventory

The inventory of single-family homes is up one (1) to 19 and this includes two (2) new listings in the period including one we have seen before. There were four (4) single-family home closings in the period. The best properties and opportunities are selling in this market.


Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is down 11 to 40 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down seven (7) to 69. The Ski Area opening definitely brings people to town and may help sales of local real estate. Sales in the market appear to be ebbing and flowing. But attractive properties in all classes typically don’t last long on the market. The usually bearish Calculated Risk blog (now on Substack) had a recent discussion about real estate inventory. It is a very important metric to watch in any real estate market. I’ve been here in this newsletter regularly reporting on the Mammoth inventory and inventory changes for over 10 years now.


Market Updates and News

A little bit of winter weather and snow hit the region during the period  but beautiful fall weather has prevailed. Temperatures were barely cold enough for snow making but the Ski Area managed to open runs and lifts for Friday’s opener. Hopefully nobody got seriously hurt. But these forced openings do bring people to town and that is always good for business. The appetite for skiing and snowboarding appears strong. The minor snow coverage in the higher altitudes set-up ideal conditions for much needed slash-pile burning, especially in the Lakes Basin (see photo above). The weather cooperated and blew most of the smoke out of town. The 15-day forecast shows one possible snow event before Thanksgiving—so the expanded snow making capabilities will be put to the test. Canyon Lodge and Eagle are scheduled to open Dec. 15. We’ll see. Again, nobody is complaining about the lack of snow, yet.

The STR moratorium continues to the be the big news in town but a proposed Old Mammoth cell tower is making significant news too. The first STR Advisory Committee meeting is Monday evening at 5:00 pm. It will be available to watch live or taped on the Town’s website. This should be the live link. The agenda calls for the selection of a Chair and Vice-Chair to facilitate the meetings. I hope they choose well. I can’t stand meeting “drift”, especially in public meetings. The private real estate and STR industry is well represented on the Committee. And pro tip—the Council member who is the biggest proponent of the tighter regulations, and the proposed need for  “equity” with the workforce housing, is on the Committee. Hopefully she gets asked lots of questions.  

The agenda package is lengthily instructive for newbies to this sort of process but one of the bullet points under the “work program”  states  “The primary distortion in the housing market that disconnects home prices from the workforce household incomes is demand from the second home market.”  What a brilliant revelation. And the “staff” seems to think this is something new in Mammoth. Maybe the response should be “If there wasn’t a vibrant tourism economy and thousands of second homes that need care and attention, than there would be no local economy and subsequently no need for any workforce.”

It goes on, “Without the ability to limit second home ownership, STR regulation remains one of the only tools available to local governments to influence purchase and hold decisions in this second home market.” Admittedly, this upcoming exercise could border on insanity. I hope the pro-real estate Committee members don’t crumble. The staff report states that the Committee is “to move expeditiously to develop recommended options for Council consideration.”  I hope this doesn’t end up in litigation, especially since the Town has such a great track record in court (there isn’t enough collective memory of all the failures). The initial meetings should be telling about the direction. Hopefully, the Committee’s recommendation to the Town Council is a simple “take responsibility.” And hopefully the public gets the opportunity to comment on the Committee recommendations (I’m just hearing a little too much “choo-choo” in my head).

One idea being floated around town is that STRs should be taxed in the “20-30%” range with that tax going towards solving the housing problem. I have no idea if that tax increment is proposed on rental revenue, or special tax on value, or what? (Would STR owners just raise their nightly rates?) What is becoming obvious to me is that there is a bitter, vocal, housing “victim” faction in town who has the ear of certain Council members (and they also think they deserve to ski 100 days per year). But in the past, drought winters and recession usually solved this problem. Maybe it will happen again?  

Interestingly, for investors in Mammoth, the concept of “jurisdictional risk” is now on the table. Sad but true.

Meanwhile, the Creekhouse developer and homeowners were “blindsided” (their term) by the quick announcement of a public hearing for an 80 foot tall “monopine” cell tower proposed for the rear corner of fire station #2 on the corner of Old Mammoth and Club Drive. This location is incredibly close to brand new Creekhouse townhomes. The MLFD is in full support of the project in the spirit of “public safety” (presumably better cell communication in Old Mammoth), but the idea of $4-5,000 per month in lease revenue is also appealing. The full public hearing was postponed until  Dec. 13 because the Town inadequately “noticed” the public hearing. The Planning Commission did open up public comments and there is plenty of opposition to the location and size of the fake pine cell tower. The opposition has time to organize and strategize, but I see more railroad tracks. Should be an interesting meeting. Maybe the MLFD guys (and gals) would like to take my EMF meter and spend some time under the cell tower on Main St.. It might change their minds.

The new Ice Rink should be open before Thanksgiving with a formal grand opening scheduled in January. I’m sure the local hockey crowd is excited. Except for the immediate neighbors, nobody else will probably notice.

I get frequent emails from about their innovative software that integrates with a variety of door locks, both front door and interior doors. Most of the STR industry is heading this way and “picking up keys” is so yesterday, and owners who have the same punch code for every guest are asking for trouble. One feature that is very attractive is the integration with Airbnb (and other platforms)—once a guest is officially booked, they are automatically sent unique access codes for their dates. That sure makes it easy for owners and managers. The problem? What if some future whack-a-doodle Town Council figures out they could seize THAT control? The possibilities are now turning a bit scary.   

And finally, the Town announced they hired two new employee Code Compliance officers. This is becoming an almost semi-annual event. It doesn’t take long before these new hires to realize that their new job makes them the “most hated person in town.” You never meet a “former code compliance officer.” Most have to leave town after their stint.

Noteworthy Sales 

I usually don’t report mobile/manufactured home sales as any real estate sales, but a 1970 manufactured home in the Ski Trails park closed for $290,000. That’s three times what they were selling for pre-Covid. Amazing. The new monthly space rent is likely to be north of $1200 per month.   

A Bigwood 1+loft/ 2 bath closed for $680,000. Almost pushing $700K. More amazing.

A second floor 2 bedroom / 2 bath in the Village closed for $1,030,000. More continued price support in the Village and these units are competing in price with the Westin Monache units of the same size. 

Other Real Estate News 

Ted (Jack) at The Sheet called last week and wanted my take on the big NAR/commissions lawsuit. He used a couple of my quotes but he didn’t address my real comments and questions, so I have my own forum to address these. And all of this reminds me of the famous Upton Sinclair quote “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” But I understand it very well.

First, this recent legal decision will certainly be appealed and will likely be dragged through the courts for years to come. Or who knows? There are new, similar and potentially larger suits already. My retirement horizon is five years, and I doubt all of this will be settled and sorted out by then. Meanwhile, there is plenty of conjecture about what will ultimately happen. The Economist magazine chimed-in that the court case “is a first step to ending the racket” of real estate commissions (of course they think we should all own nothing and eat insects in the future). Others are opining this is “the end of Realtors.”  But there is far more to all of this than meets the eye, or represented in the current mass media hysteria.

My two essential questions are; If the current system has to go, what is the proposed alternative to the existing system? Some people think they know, but that leads me to the next, and even more important question; Commissions paid real estate salespersons representing buyers are currently motivated by a sub-agency commission offer from a seller (this is the way the system works today), so in the absence of this; What is going to motivate them to discuss the property with any potential buyer? Especially if the odds of this buyer being a serious prospect for the property are very low? 

This second question comes down to the real nuts and bolts of the issue. Sellers have to motivate real estate agents and brokers to weed-through all of the “buyer noise” in the market to find a (reasonably) likely buyer for their property. And once that is done, they need to actually nurture (some call it “selling”) the buyer to ultimately make an offer and shepherd them through to the eventual closing of the transaction. (And forget the conditions of the last three-and-a-half years—this period has been a complete anomaly and conditions are already changing. In time, sellers will be back to begging agents to show their listings.) 

None of this is any grand conspiracy or collusion by the real estate industry. It is simply the human nature and common sense component of the process. Sellers need to attract the largest pool of potential buyers as well as motivated sales people. There is no better way than the current system. The real estate business is already filled with “hopium” about being paid for the time and effort spent with potential buyers. The current system eliminates the greatest uncertainty of being paid and motivates all agents and brokers to know, show, and sell the listed property.

One of the really telling conditions about all of this is when a seller either “short changes” the buyer’s commission (less than what would be considered customary), or the inverse, when there is extra commission or bonuses offered. It amazes me that offering a little less or a little more completely changes the salesperson’s attitude about the property. When taking a listing, I have always recommended that a seller offer the buyer’s agent what is expected in the market, and to do otherwise is a mistake. But that is up to them. And BTW, all of this commission stuff is 100% transparent in the California (CAR) listing agreements, and has been for a long time. It is even in bold type. And in Missouri where this NAR case originates, they have since replicated most of the California-style disclosure.   

But again, nobody inside or outside the industry is providing any viable alternatives. The “buyer paying commission” proposal doesn’t work. Unless they are cash buyers, they already have a multitude of expenses. And salaried agents? You’ll just end up with bunch of bureaucrats. Discount brokerage? We’ve been through all sorts of iterations of that. Internet and social media direct buying and selling? Good luck, they can all drive each other crazy.

In California, agents have access to a standard Buyer-Broker Representation Agreement. It is likely it will see more common usage during all of this (although I can’t say I’ve ever seen it used in the Mammoth market). The current broker cooperation and compensation structure is actually part of State law. But a move towards agents using the Buyer Rep. Agreement more commonly isn’t likely to change the current commission structure. But it may help agents to work with more serious and committed buyers. We’ll see what the future brings, maybe the younger generation of agents will embrace it. 

Over the years I have regularly collected a pile of buyer “leads” that never went anywhere. These are people I’ve talked to, maybe shown property to, etc.—basically spent time with, answered their questions, and shared my knowledge and experience. Every year the pile is usually 6-8 inches on the desk. Then one very snowy day I go through the pile. I often check the tax rolls to actually see if they purchased something. The bulk of it falls into the category often referred to today as a nothingburger. But this answers why the current system works; if there wasn’t the opportunity to discuss or show a listed property, and the potential to earn a commission, why would any agent bother in the first place? We never know who is serious and who isn’t, and prospective buyers are notorious for trying to play poker. And the sellers never really know how much time was spent with potential buyers by dozens of agents that eventually went nowhere. It is simply the nature of the business.

I remember back in the 1990s when some of the real old timers worked in my brokerage. They had what they called “career buyers.” Now this was pre-internet, so buyers really had no idea what was actually on the market. But every few months they would take these “buyers” out and show them property. It happened year-in and year-out. They typically never bought anything. The joke amongst us back then was “did you get gas money?” It was good times in a hard market.

And one of the interesting aspects of all of this current hubbub has to do the Multiple Listing Services, and where we are in the world of internet real estate marketing and information. The Realtor Associations own and operate the various MLSs around the country. The Mammoth Lakes Board of Realtors owns, operates, and regulates the local MLS. It isn’t cheap to operate and regulate. The inputs like photos, data, etc. all come from the members, all at considerable effort. We share all of data with websites like Zillow, etc. through an IDX (Internet Data Exchange) agreement. This is true with most MLSs all across the country. 

This is now an interesting part of all of the uncertainty about this litigation. What if this all became disrupted in some way? What if the Mammoth Board pulled those IDX agreements and offered it only to true, local, active members? It could be an evolutionary step (backward), and if it was done nationwide, entities like Zillow, (which is owned by Murdoch News) and plenty of others would be out of business tomorrow. And that would certainly put the value of the local, knowledgeable agent back into the spotlight. It could be a classic case of “be careful what you ask for.” 

Thanks for reading!



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

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