Mammoth Real Estate Sales Report – January 7, 2024

New Snow, A Post Holiday Visitor Surge, And Continued STR Uncertainty!

Market Summary – December 10 to January 7 

This report is for the past four (4) weeks through the holiday period—the calendar, market activity, logistics, and reader metrics make it so… The Mammoth Lakes MLS is reporting 10 real estate closings for the period ranging from a low of $429,000 to a high of $1,850,000. Of the 10 closings, all were financeable properties and only three (3) were closed with financing. The closings included three (3) Westin Monache units and two (2) condo hotel units at Eagle Base. This period last year there were 11 closings.
 
The 10-year Treasury yield ended the period down again to 4.02%. The yield was actually below 4% during a considerable amount of the period but popped up the last couple days of last week. The 30-year mortgage rate is being quoted at 6.75%. The end-of-the-year prognosticators are mixed as to where rates will go in 2024. Just as many who think they will go down, think they will go up. I certainly won’t be making any predictions, nothing is predictable at this point. The 10-year was at 3.879% one year ago.
 

Condominium Inventory

At the period’s end the condominium inventory is down ten to 51. There were only three (3) new listings in the period and one (1) has gone to escrow. A few older projects have three or more listings, but nothing significant or alarming at this point. This time last year there were 33 condos on the market. The year 2023 ends with 231 condos closings. For comparison, 2022 was 334, 2021 was 459, and 2020 was 440.

 

Single-Family Home Inventory

The inventory of single-family homes is up two (2) to 17 with three (3) new listings in the period. The new listings include two (2) homes under $900,000. An interesting time of year to list a home in Mammoth. This time last year there were 12 homes on the market. The year 2023 ends with 63 single-family closings. For comparison, 2022 was 83, 2021 was 123. Overall, the Federal Reserve got what they wanted by raising rates—slowed activity.

 

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is even at 24 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up four (4) to 42. This time last year it was 29 and 44 respectively….Recently, a reader accused me of fudging the numbers I report to make the market appear to be better than it really is. Sorry, I’ve used the same exact methodology in the past 10+ years (you can look here, ten years ago). This consistency in reporting gives the archive value for those who are interested in things like this ……Popular real estate bloggers have commented that “2023 was the year of disappointment,” and “2024 will be the year of less disappointment.” Funny, I wasn’t disappointed and don’t expect to be less disappointed this year. I guess I have low expectations.

 

Market Updates and News

This was one of the most subdued (yet enjoyable) holiday periods in Mammoth’s recent past. Especially after the winter of 2023. The lack of substantial snow coverage on Mammoth Mountain during the first three weeks of the period clearly impacted tourism. Several rental agencies were estimating being down “about 50% in revenue” for the period. The lack of crushing crowds was very noticeable in town. Numerous sunny days also made it quite tolerable. Statista was reporting that people going on Christmas vacations this year was “very low,” less than 10%. And once again, there is a question about the real effectiveness of Mammoth Lakes Tourism.

But Jan. 1 and 2 (post IKON blackout) brought a much more substantial crowd in to town, and a ~12″ overnight snowstorm last week brought the largest daily crowd of the season, proving once again the appetite and demand for fresh snow events. One client told me he waited 40 minutes in a lift line on Wednesday. Last night’s storm brought another small amount of snow, and yes, another sizable crowd.

Through the whole period the snow making crews were taking advantage of every opportunity, but up until recently the temperatures were stubbornly warm. The last few days of below freezing temps have helped as the Mountain tries to open an increasing amount of terrain. The long range forecast has snow, but they really need a good 3-4 feet storm for coverage. What a difference a year makes! The new coaster and other attractions at Woolly’s, and the new Ice Rink, helped make-up for the lack of great skiing. But the reality is that the guests come to ski and snowboard, the rest is added fun.  

The STR moratorium and process was quiet during the holiday period and the Committee is scheduled to reconvene on the 11th. It will be interesting to see what the mindset of the group is then. My Real Estate Q&Athat appeared in the Christmas weekend issue of The Sheet took a little different angle on the topic. This is a tough time of year to get people’s attention, but I had some excellent comments from some Mammoth oldtimers. One included a former Town Council member from the early 90s who hasn’t lived in town for over 20 years. He reminded me of some of the failed affordable housing initiatives and proposals from the past. In his hindsight and view, the failure to “exact/extract” adequate workforce housing out of the real estate developers was the greatest mistake. That is a big, harry discussion that I know plenty about, and it has many intricacies. Maybe I can start throwing some of this history into my discussions.

A new twist on the STR moratorium and housing process was gleaned out of last weeks’s newsletter from the Mammoth Lakes Chamber of Commerce—the celebration of a new business in town. I’m smelling something contrived. The new business named Placemate, calls itself “The  Local Housing Marketplace for Vacation Towns.” Basically, they offer a service using subsidies to incentivize property owners to rent to local workforce members. They have a track record in Colorado towns and up in north and south Lake Tahoe. Their “Solution” is “Placemate matches vacation home owners with trusted and vetted locals seeking housing.” 

Their website has a warm “feel good” vibe but the incentives offered are varied through the communities they serve. How much will the incentives have to be here in Mammoth (I’m guessing significant)? Have they done the market research yet? And of course, where is the cash for these subsidies/incentives going to come from (more STR taxes)? And after looking at all of the Founders and Managers at the company and doing some mental math, including their reported placements, I’m wondering how they make payroll? My “potential grifters coming to town” light is flashing red. I can’t wait for someone at the Town to claim they are our “saviors.”  I also wonder what their percentage is? They do have a California DRE #. They don’t represent themselves as a 501c3, which might be even more telling. How this will dovetail into the ongoing process is unknown. And of course there will be unintended consequences. Some long-time landlords may just start raising rents out of simple belligerence if the subsidies are that substantial. That will help the cause.  

Correspondence from the Snowcreek Property Company states that the Town is reconsidering the location of the new Old Mammoth cell tower. The open space knoll on the Catholic Church property is a possibility but the Town would have to tinker with the zoning regulations. Or maybe they can create an “emergency.” Maybe this will become the Town’s theme for 2024? But I also think the Church would probably like the $5,000/mo cell tower rental revenue. The Pope should approve if he gets his 10%.

I have various experiences with insurance claims arising from property damage from the winter of 2023. Many claims have been substantially paid in the past two months with more coming. This is good news. Many HOAs and owners have been “out-of-pocket” on these claims. 

The tenants on the Berner St. industrial property in the Village have been given termination notices which would indicate that construction of the  Mammoth Lakes Hotel should commence this summer. This is approved as a Residence Inn (Marriott) property and the units include kitchenettes and stack washer/dryers in the units. This is good news, this old industrial area is some of the worst appearing real estate in all of Mammoth and steps from the core of the Village. 

During the holidays I had the chance to finally read Steve Searles new book “What The Bears Know.” The book is excellent in format and content. Far better than I expected. I highly recommend it. It is also full of interesting insights about the Mammoth region and history. It is a book that should be in the library of every Mammoth STR.

Noteworthy Sales 

The Westin Monache closings show good price support in the project and especially for better locations in the building and better views— they simply equate to higher prices. The units are not created equally. The odd ball “41 stack” 1 bedroom plus den / 1 bath closed for $675,000.

Other Real Estate News 

At year’s end it has become trendy to look at the highlights (or lowlights) that happened in the past year, and look at them in retrospect. From my newsletters….

January 15, 2023

“Looking at condos versus homes can also be enlightening in these conditions. Single-family homes can become significant management burdens in heavy winters, even with a good management company. Condo management companies have built-in crews and often have high priority with their heavy equipment contractors. Bigger crews can absorb the loss of individuals due to illness or injury. While some buyers balk at the high HOA fees in Mammoth, there are actually economies of scale, especially on the snow removal/snow management side.”

Many single-family sellers in the summer and fall of 2023 were motivated by the nightmare their property became in the winter of 2023. I’m sure the new owners are thinking “no problem” in the winter of 2024. Surviving Mammoth’s extremes remains the key to success.

April 23, 2023

“Many potential Mammoth real estate buyers have been asking about foreclosures and REOs (REO being a longstanding industry term for Real Estate Owned—properties owned by an institution via foreclosure that it wants to liquidate). A new REO listing hit the MLS during the period and it created some interest. But this new listing itself is indicative of what the next cycle might be like. There are new processes and laws in place and I expect even more changes. But the future of all of this is far from clear.

First, the new REO listing located in the Sierra Valley Sites is not a newly distressed property. The default was in the system prior to the pandemic. So it is certainly not “the beginning” of a foreclosure cycle and trend in Mammoth. My readers know the inventory remains low here in Mammoth and values are being upheld by buyers. But the specifics of this new listing are a sign of these new times—the listing agent discloses she hasn’t even been inside the property (how do you do an accurate market analysis?) and the property is emphatically being sold AS IS and buyers are not allowed to have any access or inspections.”

There are no foreclosures on the Mammoth horizon. I see very little, if any, stress in the current real estate market. If there is stress, the property should be on the market. A slower STR market (Mammoth Lakes Tourism says I’m wrong about this) may bring some new listings, but that isn’t likely to happen until spring or summer.

August 13, 2023

“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.”

I have said for years “every winter is different.” The last 12 months is proving that. This is looking more like the winter of 1991. It barely snowed until March, and then it was a 200 inch month. The Ski Area was just learning how to make snow back then. That winter was a complete bust. But it was also the fifth year of a serious drought cycle.

August 27, 2023

This was before the RMF-2 moratorium.

“And MTR has also become increasingly popular, both for owners and renters. In fact, this may be the most interesting part of the current rental market. This would be rentals in the 30-90 day range. One key is that with any rental over 31 days in Mammoth, there is no TOT or TBID taxation. This can be a substantial saving which can benefit both the owner and renter. The end-of-the-year holidays and January are obviously a prime period. But there is demand through the whole year. And the fall is a new demand period—the change of seasons and  geotourism. Some STR owners are attuned to this demand during less demand periods like the fall. I occasionally get calls from people looking for these types of rentals. I refer them to VRBO.”

With the current process looking to increase regulations on STRs, some owners are going to look for alternative rental strategies. And the guests may be looking at different strategies also. We”ll see if this STR Committee recommends taxing these type of rentals too. Like my Q&A column states—every guest needs to be taxed! 

Happy New Year!

Thanks for reading!

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

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