Mammoth Real Estate Sales Report – December 10, 2023

Snowmaking Tries To Go Full Bore As The Holiday Period Approaches!

Market Summary –  November 26 to December 10 

The Mammoth Lakes MLS is reporting 13 real estate closings for the period ranging from a low of $518,500 to a high of $2,575,000. Of the 13 closings, 12 were financeable properties and nine (9) were closed with financing. The closings included two (2) low-end homes and three (3) high-end homes. The high sale of the period is a home in TimberRidge Estates that closed for $3.2M in March of 2021. I’m guessing the winter of 2023 took its toll on the value of this property at 8,540 feet of elevation (about as high as you can get in Mammoth). There was one (1) more high-end vacant lot closing.
 
The 10-year Treasury yield ended the period down again to 4.23%. All of the Treasuries under one year of duration remain above 5%.  The 30-year mortgage rate was being quoted at 7.09%. There is plenty of the typical end-of-the-year noise in the economic markets. And there are so few people shopping for mortgages right now it is hard to say what the real Mammoth rate would be. But the downward trend has to be viewed as a good thing for the market. 
 

Condominium Inventory

At the period’s end the condominium inventory is down six (6) to 61. There were six (6) new listings in the period and one (1) has gone to escrow. There is no apparent sign of any rush of RMF-2 zoned properties coming to the market. The next month is prime time rental and usage for most condominiums in Mammoth. 

 

Single-Family Home Inventory

The inventory of single-family homes is down three (3) to 15 with no new listings in the period. Some home listings are bound to be withdrawn or expire in the coming weeks, so this inventory is likely to go even lower. It is that time of year. 

 

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is down another five (5) to 24 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down 15 to 38. The holidays, the economic conditions, the snow conditions, interest rates, and more have the local market in a subdued state. Many industry participants are welcoming the break.

 

Market Updates and News

The lack of any significant snowstorms in the fall of 2023 will have Mammoth Mountain relying on its extensive investment in snow making for the upcoming holiday period. There are no storms in the 15-day forecast so they will be pushing the limit on snowmaking. So far it is impressive, even without much of the needed colder temperatures. But high temperatures (like today) in the 50s don’t help. Canyon and Eagle are scheduled to open on Friday the 15th. Eagle is going to be a challenge (see above, today). The new Chair 16 has been spinning the last few days but there appears to be more work needed to complete the new enclosures. The delays are more impacts from the winter of 2023. The holiday crowds will come regardless, and they can ice skate, go for a hike, or just chill out. And this is Mammoth—a big storm can hit at any moment. 

Meanwhile, none of the local residents seem to be complaining for the lack of a major snowstorm. Repairs, ongoing maintenance and construction continue in almost summer-like fashion. Almost everybody got a late start, so the late finish is welcome.

The STR moratorium remains the hot real estate topic and I cover my take on it in the Other section down below. These are becoming long-winded discussions but there are numerous personalities and agendas involved. My latest thoughts are; if this housing crisis is so critical and the Town needs to solve it, Why are we spending millions and millions on marketing when those dollars should be reallocated to the housing problem? AND, why is the Town still pursuing the new City Hall/Civic Center project on the Old Mammoth Rd./Tavern Rd. parcel (across from the old Charthouse)? Shouldn’t the dollars (and the land) be dedicated to housing? Hopefully these topics come to the front of the public discussions and comment.

Speaking of marketing, Mammoth Lakes Tourism (MLT) says that September and October were “record” months for TOT. This is hard to believe. The town was dead. Outside of a week on the ocean, I was here working every day and I live and work in the heart of the resort. Soundbites from government agencies are becoming less believable by the day. If it is true, Mammoth has absolutely hit the “quality not quantity” target. But I suspect MLT is increasingly finding their extreme level of funding under public pressure. As it should be.

At last Wednesday’s Council meeting they were boasting about the $5,000 in revenue that the ice rink generated on its first weekend. Funny, they can divulge income but they can’t divulge expenses. I wonder what the electric bill looks like?

The proposed Old Mammoth cell tower controversy has been overshadowed by the STR madness but was supposed to be back up for discussion this week, but doesn’t appear on any agendas that I can see. Hmmm…Of course, it is actually surprising there is as much going on as there is, most of government thinks December is vacation time.

On the tax appeal side, we had a scheduled hearing during the period and the tax payer no-showed. This costs the County extra time, expense and hassle for nothing. Many property owners hire tax appeal “professionals” who promise to get assessments reduced and owners think “they have nothing to lose.”  Some do it annually in due course, and some just do it out of belligerence. From my standpoint, using these services can backfire. If a property tax payer uses these services in a way that becomes a nuisance to the Assessor’s office, they can be guarantee they will get the 2% annual increase in their assessed value whether it is warranted or not. And we may be heading into a period where it isn’t warranted. That 2% can be insidious. And if the Assessor knows there is going to be another frivolous appeal, based on history, with no serious follow-up, then why not try and push the assessed value? Non-serious appeals can be a fool’s game. 

Noteworthy Sales 

The two low-end single family homes, closing at $750,000 and $820,000, were not only small but in some of the least desirable locations in all of Mammoth for a home. 

The newer listing in the Starwood subdivision closed at $2,200,000, or 85% of list price. That was fast.

A 2 bedroom + loft / 2 bath at Courchevel closed for $925,000. The highest price sale ever in this project by $45K. 

Other Real Estate News 

With the STR moratorium now extended until May, the newly formed STR Committee held their second meeting and there was some re-shuffling of the participants, just some who’s in and who’s out. The Town Manager (who is on his way out) and Finance Director are in attendance and clearly steering the direction of the Committee. They seem to have lots of ideas on how to increase regulation and control over the STR operations in Mammoth. But they too, have no specific ideas or answers as how to cause the conversion of RMF-2 zoned condos into long term rentals (preferably for local workers). They think they have some idea, but it is beginning to appear that it is based on a mistaken premise that some RMF-2 zoned condos are more desirable for STR than others. They keep mentioning the “portal” properties as something sacred. 

(As a side bar, “portal” is an old Forest Service concept to describe where the skiers and snowboarders enter and exit the Ski Area. Remember, the Forest Service still has some control over their tenant, Mammoth Mountain Ski Area, and they play a part of the planning and operation. Currently, the portals of Canyon Lodge and Eagle are becoming more important as the Ski Area plans the redevelopment of the Main Lodge area. Because of this, the portal traffic and “skier services” needs to become more concentrated at Canyon and Eagle in the short and medium term, and maybe forever. The Forest Service has long wanted fewer skiers and snowboarders driving up Hwy. 203 and entering the Mountain at the Main Lodge or Chair 2. “Mobility” and reducing vehicle traffic are increasingly important issues at ski resorts.) 

The immediate action of the STR Committee is to break into sub-committees basically focusing on “Certified properties”, “Zoning”, “Housing” and “Carrots and Sticks.” (This group as a whole has only met twice and I’m becoming less optimistic about a objective outcome, but we’ll see.)  These sub-committees are only 3-4 people so their suggestions could be marginal or limited at best, or heavily skewed. Hopefully the group as a whole can elaborate on these topics.  

Let’s look at these subcommittee topics and where the steering appears to be going. First, Certified properties. There appears to be broad agreement in the community that the Quality of Life ordinance (the STR regulations established in 2015) needs some updating and fine tuning. I agree with this, but on a limited basis. There is special concern about the re-certification of properties, something like every four years. And many in the community are beginning to sense this may be the smoke screen, or inadvertent driver for something else. Time will tell where the Committee lets this process go to.

But based on their presentations, the Town Finance Department (who is the primary regulator of STR—namely collecting bed tax aka TOT) seems to revel in catching and fining STR offenders. It is almost subtly psychotic. You can see their excitement about wreaking vengeance on the violators. It has almost become the “absolute power corrupts absolutely” moment in Mammoth. They now appear to want to micro manage the ~3,500 STR units located in Mammoth Lakes. They express they will need a bigger staff (and maybe they will need to be armed like IRS agents?). But here’s a big problem—the Town has a poor record of enforcing most things (like fireplace ordinances, or sign ordinances, or so many other things). 

A reader with local STR experience wrote in The Sheet asking about the current compliance and enforcement of the existing Quality of Life ordinance. It was a great question. The Finance Department can’t even adequately report on the present state of affairs—volume of complaints, percentage of compliance, and other metrics. They claim they want to assure health and safety standards in the units, but they seem overly focused on catching STR violators. And creating unnecessary extra pain for the owners of STR properties.

Again, the Town has a poor track record of ordinance enforcement. For years the real estate industry has dealt with the confusion around some of these unenforced regulations. It creates unnecessary uncertainty. But is every law in town strictly enforced? Traffic, pedestrian and parking laws are constantly broken. Ordinances too. Resort towns have to strike a balance between strict law enforcement and allowing people to have a good time and having a friendly environment. This includes a business environment. This should also include STR owners who pay property tax, generate TOT, support the community in a countless ways, and much more. I can’t wait to see what the sub-committee thinks.

The next sub-committees are Zoning and Housing. The implication so far from the Town staff, and others, is there is an opportunity to carve the RMF-2 zone into some sort of pieces, with specific restrictions, that can somehow improve the current workforce housing shortage. But again, nobody has any specific ideas about how this is going to work. And back to “portal” properties. There seems to be a prevailing idea from the Town staff that RMF-2 properties near the ski lifts are the most valuable and desirable for STR. But this is horribly wrong. They are valuable for sure, but not for everybody, not for owners or guests. They clearly haven’t spent decades showing properties all over town to prospective buyers.

I often say Mammoth condos come in “31 flavors”, and it is true. Every owner and every renter/guest has a different idea about what an ideal location is. Many potential buyers in this market rent (and stay in) units all over town to “test drive” different projects, floorplans, locations, etc. before they ever get into real purchase mode. And their thinking is always changing too. The condos all around Mammoth Creek Park where the new ice rink is are all RMF-2 zoned and certainly not near a portal. But they are likely to become increasingly popular as STR properties. I have an owner who has owned at Eagle, adjacent to the Village, and ultimately settled on Old Mammoth Road because he valued being on the Red Line shuttle and steps to Roberto’s. He’s very happy with his decision. And his STR is very successful. 

For every buyer and owner there is a reason for owning anywhere in the RMF-2 zone. Some of it is plain affordability (the same is true for guests). And many of the least expensive units in town have a history of the best STR ROI (and guest demand). The Town staff (or Council) can’t determine what is valuable and what is not. They have no clue. But it appears they think they can start picking winners and losers. I’m guessing they think they are smart enough to start spot zoning the town based on where they think our guests should be staying and where the workforce should be living—which projects or locations are deserving “housing orientation” or “STR orientation”.

Ironically, it was noted public planner Eldon Beck, the man who conceived and planned most of the modern mountain resort “villages” including Mammoth, who taught us that the visitor will always seek out the places where the local residents are. A successful business or village needs to draw the local residents and visitors (think the old bars at Nevados or Slocums). The Mammoth RMF-2 condo projects actually create this wonderful interaction (even though it can be annoying for the residents at times). But now the Town social engineers appear to think we need to divide the RMF-2 neighborhoods in to almost “no-go zones.” 

Again, I can’t wait to see what the subcommittee come up with. 

And what kind of Housing enlightenment can a sub-committee bring us? Yes, we need it. Nothing has changed in the last 35 years. The Town has to “buy it, build it, or subsidize it.” The “missing middle” or middle income housing shortage is the result of inaction mostly driven by the fact that there is little or no government sponsored funding, subsidy or tax incentives to produce it. It is challenging. There is still time to go back to the 30+ year old map of Shady Rest (The Parcel) and develop the 52 middle income townhomes (see below). There are other potential projects in the County within 30 minutes. But there is no political will. The past and present Town Councils and County Supervisors are to blame. But they think the RMF-2 owners should be blamed and burdened.

The Carrots and sticks sub-committee should come up with some interesting ideas too. The most sadistic Committee members probably signed-on for this group. It could be telling. Will it be the STR owners rewards and punishments brought to you by your local bureaucrats? Or what carrots and sticks will motivate (or coerce) RMF-2 STR owners to convert to long term rental (and at low rates so local residents can afford it?). But do we really need carrots and sticks? Mammoth Lakes Tourism (MLT) learned in the past few years about the need to “educate” our guests so we can all have a better experience. It was an enlightenment moment for them. Can’t the rest of the Town departments follow? Seems the proponents of this exercise are stuck in some carrot and stick mentality.  I hope there is tremendous public input on this topic alone.

Meanwhile, the last Council agenda included some closed meeting agenda items discussing the purchase of specific condos in Mammoth. All three are RMF-2 zoned properties. It is unclear whether they are already strong-arming owners into selling or have created some sort of “panic selling” environment. My experience is the Town doesn’t make good decisions in this arena either. They purchased a 2 bedroom unit that I had listed in 2022 for $489,000, cash. They purchased it with the intent to resell it to a local resident. Sixteen months later a local buyer closed on it for $350,000. For what they have spent on the ice rink they could have subsidized 215 of these type transactions… 

And of note, ADP employment services reported this week that leisure and hospitality jobs declined for the first time since Feb. 2021. Their Chief Economist was quoted “Restaurants and hotels were the biggest job creators during the post-pandemic recovery. But that boost is behind us, and the return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024.” Is all of this housing hullabaloo just a knee-jerk reaction? Will anybody on the Committee mention this?

And lastly, as a point of interest, I would like to make a workforce housing historical reference that most people don’t know about in Mammoth, and especially pertaining to middle-income housing. As part of their housing mitigation requirements, Intrawest built a project by the name of San Joaquin Villas (now next door to the new Reserve development off of Main St.). The project was completed in ~2007 and the 4 bedroom units were designed to be purchased by local workers (can’t use the word family) with significant subsidy. The timing was horrible. The pricing was all wrong in a falling market. But Intrawest’s contract with the Town stated that if the units were not sold to local residents under the deed restricted program within a time specific (approx. 1 year), that Intrawest could remove the deed restrictions and sell them on the open market. Eventually the Town lost many units that were specifically designed for middle income housing to second homeowners. And ironically (and maybe worse), the units are in the Resort zone but not available for STR. Crazy.

All of this reminds me of the proverb “the road to hell is paved with good intentions.”  Public comment and input will be critical in the coming months.

I’ll be back in three weeks, or so. Merry Christmas, Happy New Year, or whatever you are celebrating! Pray for snow?

 

Thanks for reading!

 

 

 

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

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