Mammoth Real Estate Sales Report – November 26, 2023

No Snow, No Housing, But We Have An Ice Rink!!

Market Summary –  November 12 to November 26 

The Mammoth Lakes MLS is reporting 19 real estate closings for the period ranging from a low of $230,000 to a high of $1,500,000. Of the 19 closings, 15 were financeable properties and only seven (7) were closed with financing. The five (5) highest sales, all over $1.3M, were cash purchases. The closings also included three (3) units at Forest Creek Condominiums with selling prices less than earlier in the year. There has been considerable turnover in this project in the past six months. 
 
The 10-year Treasury yield ended the period down again to 4.472%. The 30-year mortgage rate was being quoted at 7.32% on Friday but the industry is gone for the holiday. They did have time to say the demand for mortgages “was at a six week high.” Jumbo rates have inverted and are now being quoted higher than the 30-year.
 

Condominium Inventory

At the period’s end the condominium inventory is up two (2) to 67. There were six (6) new listings in the period and none have gone to escrow. Of the six (6), four (4) are in the RMF-2 zone and two (2) belong to the same owner (that would be a curious interview). As we move into the prime rental season for STR condos, sellers become more reluctant to sell and transactions can become dicey with the disposition of established bookings. By my count, there are 42 condos on the market in the RMF-2 zone. There are concentrations of resale listings at Mammoth Ski & Racquet and Sierra Park Villas. There are only four (4) Westin units on the market. There are eight (8) Creekhouse units on the market but five (5) are new units under construction (the last of the project).

 

Single-Family Home Inventory

The inventory of single-family homes is down one (1) to 18 with two new listings this weekend. There has been good action on the sub—$1M properties, but one back-to-the-market property. The ~$1M inventory doesn’t get you much in the current market. The best deals are gone. 

 

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is down another 11 to 29 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down 16 to 53. Interest rates and tighter qualifying, STR uncertainty, and a whole host of macro factors have the market slowed. It could be simple exhaustion, the last three-and-half years have been nutty. Throw in a paralyzing winter, and all of the market participants deserve a rest. In normal times, the market does slow at the end of the year.  

 

Market Updates and News

Mammoth has yet to have a significant snow event and the 15 day forecast doesn’t show any possibilities at this time. The crews trying to complete the new Chair 16 are probably grateful. It is scheduled to open Dec. 15., or maybe not. The Thanksgiving weekend was the most sedate and uncrowded in recent recollection, and the Ski Area has too little open and too many participants on what is open. I’m sure it is fun for some but it is a big “pass” for most. In fact, some people (like me) are simply terrified of these conditions.

The big news is the new Ice Rink at Mammoth Creek Park West is open. I’m sure they have some bugs to work out. There is a faction in town that is ecstatic. I know adjacent property owners who are sick over it. This process to enclose and move the rink facility started in 2015. All told, including all of the costs, enhancements, and additional operating costs for the first five years, and on-and-on, it is a ~$30 million project. We have no idea how it will ultimately impact the resources of the Town. It is the largest financial endeavor the Town has ever taken on, by far. I’ve written extensively about it. In retrospect, if all of the energy and dollars were spent on workforce housing, there would be little problem today. I wonder how many of the ice hockey die hards have moved away? I hope it doesn’t go down as one of the worst decisions ever made by the Mammoth Lakes Town Council. It was a 3-2 vote. 

Speaking of Town Council decisions, I have covered the STR moratorium down below in the Other section.

The Limelight construction crew is making the best of the nice weather. They were even working last Sunday. The second floor of the hotel portion appears to be structurally completed. The way they are going they may have the third floor done by the end of the year. It is looking quite impressive on the hillside. The Limelight has many not-so-obvious benefits to the community, and I covered that in part of my Real Estate Q&A that ran in The Sheet this weekend.

Senate Bill 584 that proposed a statewide tax on STR still has gone nowhere, presumably it died somewhere or somehow. But California AB 968 becomes law on January 1, 2024 and it is quite interesting. It is being referred to as the “flipper law.” Basically it states that any owner who has owned the property for less than 18 months has to make the following disclosures; 1.) all repairs and renovations when performed by a contractor with whom the seller entered into a contract, 2.) the name of each contractor and their contact information, 3.) any permits obtained (or if not obtained, the contact information of the third party who can provide the permits)…On face value this seems like a good law, but I’m sure work-arounds are all ready being contemplated. One I see; “I didn’t hire any contractors, they all worked under me, the owner/builder.”

One local STR/rental agency was blasting me with Black Friday sale discounts on their properties under management. I have noticed other websites offering discounts on specific properties. The battle between quality-versus-quantity goes on. 

Noteworthy Sales 

A smaller, older home in The Trails closed for $1,400,000. Probably the highest ever per-square-foot sale in this subdivision.

And “original condition” 2 bedroom / 2 bath at Sunstone closed for $899,000. And it didn’t even have a view. 

Two more lower-end lots closed in Old Mammoth and the Slopes. Two high-end lots closed in The Bluffs for big numbers. The buyer demand for vacant lots all through the spectrum of the market continues to impress. Which leads to… 

Favorite New Listing For The Period

This vacant lot is in the adjacent subdivision to The Knolls called Holiday Pines. But it has all of the quality trees and feel of The Knolls. This backs to Forest Service land so it has immediate access to the trails and open space. Oversized at almost 20,000 square feet, the lot has a natural building pad but lends itself to all sorts of potential designs. Room for an ADU or an extra large garage? This is close enough for an easy walk to the Village, but away from all of the traffic. South facing.

Listed at $429,000

Other Real Estate News 

The STR moratorium related meetings paused this last week but will reengage this next week with both Town Council and STR Committee meetings. The meetings the previous week were somewhat confusing for both the participants and observers. Attendees at both meetings were pressed to define what the desired outcome of this exercise should be. Some are focused on reviewing the current STR regulations and operations to see if additional or different regulations are warranted. Another faction is clearly looking to concoct a nexus between the Mammoth STR market and the local workforce housing shortage, and ultimately create some contrived mechanism for the RMF-2 condo owners to help resolve the current housing shortage. One Council member warned of the potential for “scope creep” on this project—clearly, the goals are not well defined. It was not a great start.

Local real estate broker Mickey Brown posed four questions to the Council (on the 15th) and requested each Council member to individually answer. The questions (and I’m doing some paraphrasing), 1.) Is the primary objective to limit the number of STRs with the assumption some will transition to long term rentals? 2.) Is the objective to restrict STR with the idea that property values will drop and become more affordable to those in the workforce? (My note is that values would have to drop by 50% or more for this to happen). 3.) Is there an objective to limit the number of tourists to town? 4.) What is the quantitative measure for success of this exercise?

It was good to get the Council member’s answers on the record, and some were clearly squirming in their seats. They all answered NO to questions 1-3. They stated there are “no assumptions” for this exercise. Question 4 was more difficult for them to answer. It all seems quite nebulous. The messaging was a disaster. My question; if the current STR regulations really need to be reviewed, was the disruptive moratorium and the subsequent formation of the STR Committee really even necessary? Or is the moratorium just a mechanism to force broad engagement? But there is clearly a small faction that has more insidious ideas. One quote that stuck with me was, “it is about STR in the scope of a housing crisis.”

One almost laughable moment during the discussion of potential zoning code changes was when Mayor Wentworth said, referring to potential, radical changes “for instance, we don’t want to put residential into the Resort zone.” He must have short term memory loss—he was on the Council less than 10 years ago when they did exactly that. John Hooper implemented huge changes in the Lodestar (Sierra Star) master plan that allowed the development of the Graystone and the three Graybear single-family neighborhoods (52 luxury homes) that were previously planned for condominium development. How soon we forget.

But again, there is clearly a Council faction that seems hell-bent on RMF-2 zoning code changes that could significantly impact STR (and likely their values). Approximately half of the condos in the RMF-2 zone are currently STRs. That equates to a lot of owners, lots of equity, lots of potential loss of revenue and potential loss of resale value. If this action is ultimately successful, I’m guessing there is a high likelihood of litigation. Mammoth RMF-2 Owners vs. Town of Mammoth Lakes?. I hope not.

That said, let’s get down to brass tacks. I was taught many years ago to “count to three”. That is the majority vote needed to pass something on a five member board like the Mammoth Council.  It is an important thing to recognize. So let’s look at the players and their positions. 

Council member Sauser voted against the moratorium in the first place, the lone NO vote. I doubt he is going to go along with any radical zoning changes or other whacko ideas. Ironically, he has lived in Mammoth basically his whole life, and in the historic RMF zone (aka The Ghetto). 

Mayor Wentworth seems mostly interested in reviewing the STR regulations and operation and reminded everybody on the 15th that “STR is in the DNA of the community.” He was involved in the Quality of Life/STR ordinance back in ~2015 so he knows the topic and knows there could be some refinements. He seems to shun the idea of zoning code changes, but there is no guarantee. He could blow with the wind, whichever way it may blow.

Council member Busber is all about “facts and data”, her words. The process has been void of any facts and data so far. She is very new to the community and lacks any historical perspective. She is on the STR Committee, so she will be present for all of their deliberations as well as the Council’s. Her vote may very well be the deciding vote. She didn’t run on being a socialist, so there is hope. But she too is likely to be confused about the goals of this exercise, and the direction of the wind.

Council member Rea has already had to apologize for her “Realtor hate speech” from a previous meeting. One online public commenter (on the 15th) who’s name I did not recognize suggested she should resign for these comments. She was quick to apologize but we know where she stands. She seems uninterested in reviewing any changes to STR regulations and operations and fixated on some sort of RMF-2 zoning code changes. I’m sure her friends in the community are relying on her.

Then there is Council member Rice. The nexus between STR and the housing shortage (and what should be done about it) appears clear in her mind, although she doesn’t seem capable of articulating it. It was one of her campaign platforms. She too appears to be uninterested in looking at the deficiencies in our current STR regulation (although she is sitting on the STR Committee). But she appears ready to propose some extremist measure to create some zoning code change in the RMF-2 zone that will magically open up dozens of condos available for local residents to live in (and perhaps with rent control?). She doesn’t appear to have a clue what this proposal actually looks like, she’s probably waiting for somebody else to conjure it up. And she must be thinking that the town’s attorney will be supportive of whatever it is (maybe he will?). She keeps mentioning something that seems to be important to her, “the ratio of homes to condos in Mammoth is disproportionate.” Again, what that has to do with anything is not articulated. Disproportionate to what? A modern suburban neighborhood? Mammoth is a relatively modern mountain resort community that was predominately built by real estate developers who built what was in demand—resort condominiums. Apparently in Rice’s mind, this has now created a new class of housing victims?

There it is, count to three. Or not. The travesty is only beginning.

Meanwhile, individual members of the real estate community including various agents, brokers and property managers are engaged on many levels. Many have “punched above their weight” so far. I encourage them (and more) to continue…And sorry to disappoint some, there is no collusion going on—just individuals standing up for property rights and common sense.

On an encouraging side, Mammoth Lakes Housing is now renamed (and re-missioned) to Eastern Sierra Community Housing. After a collaboration in Bishop, MLH’s experience is important to form a more regional housing authority, especially in Mono County. MLH has a long history of pushing workforce housing, the planning, capturing grants and other financing, management, etc.. This is especially important because the most valuable, and much needed, middle-income housing opportunities are in Mono County and not within the Mammoth Lakes town limits. These opportunities are all within 30 minutes of Mammoth and can also provide housing for workers in other parts of the County. The County has been especially inactive when it come to workforce housing. The have a pretty Housing Element but they have done nothing. It is surprising the State has not cracked down on them.

The Tioga Inn parcel is 30 acres and could accommodate up to 100 units. The proposal was in front of the County Supervisors in 2021 and ultimately denied. The current political environment would most likely approve the project but the property owner is looking for more favorable development conditions and incentives from the County. Can’t blame him after being denied after large expenses and dubious conditions. There is plenty of water onsite already developed and power and internet are right there. Easy access to Hwy. 395. This is 30 minutes to Mammoth but would also be ideal for the many Hwy. (Caltrans) and utility (SCE) workers in the area. There is typically no significant snow load in this area.

Then there is the Fobes Forty property. Located in south Mono County between Aspen Springs and Tom’s Place. Designed for 28+ duplex townhome style properties on an attractive, sunny development site for a community-style living environment. Easy access to Hwy. 395 and ~20 minutes from Mammoth. An ideal middle-income housing site. Owner is willing to offer extremely attractive price and terms to the County. But there is no vision, and no impetus.

The housing victims need to be in front of the County Supervisors.

And last week I had three readers send me a Wall St. Journal article titled “How Two of America’s Wealthiest Vacation Spots Are Fighting to Free Up Homes for Locals.” Vail and Nantucket. I guess Mammoth is in good company.

Enough for now. The next round of meetings might bring us some added clarity. Or not.

Thanks for reading!

 

 

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

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