Mammoth Real Estate Sales Report – February 18, 2024

More Storms Improve Mammoth Conditions, And Some STR Clarity?

Market Summary –   February 4 to February 18 

The Mammoth Lakes MLS is reporting 13 real estate closings for the period (same as last period) ranging from a low of $375,000 to a high of $2,949,000. Of the 13 closings, 12 were financeable properties and six (6) were closed with financing. The closings included three (3) Snowcreek properties and two (2) Sierra Park Villas condos. The high sale was in the Snowcreek Ranch “behind the gate.” This period last year there were only five (5) closings, but the town was buried, and rather paralyzed.  
 
The 10-year Treasury yield was up significantly at the end of the period to 4.30%. The high inflation numbers released late last week might have had something to do with the late-week jump. Oddly, almost every yield in the Treasury spectrum, from 30-day to 30-year, is higher than the 10-year. But we’ll see how long the government can keep paying these higher rates, especially with ever increasing new debt. The mortgage industry is quoting the 30-year conventional rate in the low 7% range. This time last year the 10-year was at 3.744%.
 

Condominium Inventory

At the period’s end the condominium inventory is down three (3) to 53. There were 11 new listings in the period and one (1) has already gone to escrow. There were three (3) new listings at Mammoth Green with no apparent reason (yet) beyond coincidence. These are attractive units with a Sierra Star golf course location yet walkable to Eagle Base. These are great four season properties. What condos went to contract/escrow in period? They include three (3) 2 bedroom +loft Snowcreek units, an upgraded 1 bedroom at Snowcreek, a 2 bedroom/ 2 bath at Horizons Four and 1 bedroom units at Seasons Four and the Westin Monache. This period last year there were 33 condos on the market.
 

Single-Family Home Inventory

The inventory of single-family homes is down two (2) to 11. There was one (1) new home listing and it has already gone to escrow.  And what homes went to escrow in the period? They include the new one in the Hidden Valley subdivision near the Village, an Old Mammoth home with an A-frame ADU, and a low-end home “behind the Post Office” that had significant days on market. There was a new fourplex listing and a new eightplex apartment listing. This period last year there were only eight (8) homes on the market, if you could find them.
 

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is down one (1) to 33 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down two (2) to 59. This time last year were 33 and 45 respectively. Excellent ski conditions that are now guaranteed well into spring should bode well for increased real estate activity. Interest rates are the wild card.
 

Market Updates and News

Despite the last IKON blackout days of the season, the President’s weekend crowd was substantial but probably not as big as the previous weekend. A bigger crowd will roll into town this week for “Ski Week” when kids and families come for the annual ski ritual. I’m seeing lots of multi-generational families coming—grandpa and grandma coming to ski and snowboard with their grandkids. I’ve also noticed that families have been here during the last two midweeks, it seems like the Ski Week tradition is being spread out much like the spring break weeks have over the years. The kids not in school is great for business. Hopefully their math scores don’t reflect all of the time off.

Mammoth has settled into a more winter-like storm cycle and may even escape the definition of a “drought winter” in 2024 if it continues. A couple of major atmospheric river events could certainly do it. 

The Mammoth Town Council’s struggle with the RMF-2/STR moratorium and all of its trappings was all over the board during the last two weeks (I did call it “almost schizophrenic” in my Q&A column two months ago). On short notice, probably so few people would notice, they called a special meeting for last Thursday to review the BAE STR Study report. While it became a lengthy (and productive) meeting, the report and presentation revealed that it should just be tossed in the trash. The lengthy recommendations were mostly deemed “not applicable” to Mammoth, revealing that it was indeed just a cut-and-paste job from another report (how much did the Town pay for this study?). 

The two recommendations with any substance, and debated by the Council, were the potential wait period for new owners to apply for STR licenses, and a potential cap on the number of STR licenses. When questioned about how these recommendations have worked in other communities, the BAE consultant/author replied, “we don’t really have good numbers and it varies from community to community. The outcome is uncertain.” So it is all conjecture and pie-in-the-sky nonsense. Talk about a big waste of time and resources. Poor council member Sauser, who was the lone dissenting vote on the moratorium, was yawning incessantly during much of the debate.

Ultimately, here is where we are going. The updated STR Certification process should be in place sometime this summer, that is if the Town can execute on it. There will be a 2% “general tax” referendum on the ballot come November with these dollars specifically allocated to housing subsidies of some sort. It will be competing with a local Fire Dept. bond issue. The moratorium is likely to expire in May. The STR caps and wait periods are all on the table in the future and may/will be revisited if the 2% tax doesn’t come to fruition. But it is a count-to-three issue, and whether some council members survive, or come to their senses in the meantime is yet to be seen.   

Most are still trying to figure out why an emergency moratorium was placed on the RMF-2 condos….Meanwhile, I have some ideas about who also needs to be taxed to support workforce housing. The discussion is down below in the Other section and I’m hoping this can become a broader discussion in the community in the coming months. 

The proposed Old Mammoth cell tower located at fire station #2 was on a rare Planning Commission meeting agenda this last week (they have luckily been spared all of this STR moratorium noise the last few months). There was overwhelming “public safety” testimony that this cell tower is needed in this part of town for emergency communications. And of course, the consultant attorneys were rather persuasive that “cell tower rights” are so strong in the State of California that rejecting the proposal was not in the Commission’s or Town’s purview. The item passed 5-0. At least they will try to make the new 85 foot tall tower look like a pine tree. And the ~$5,000 per month lease should help the fire department members to afford some Faraday clothing. 

The Town has been in closed session negotiations with the Mammoth Lakes Foundation over the property at 100 College Parkway that houses the Edison Theater and Foundation offices (see above). The onsite improvements were a donation from Tom Dempsey, the original Snowcreek developer. The building once housed the largest ski museum in the country. The theater has been used by the local theater group in the past and the Foundation recently (in past years) had grandiose plans to build a massive theater complex. Even though they raised millions of dollars for the project, they eventually decided their focus was the college. Now the Town, flush with money, is eying a similar project that could include another sprung structure to house a much larger theater facility. We’ll see. The end negotiations will be interesting; the Town always ends up on the sucker side, and the Foundation Board includes two savvy local real estate brokers.       

Airbnb was in the news this past week with its 4th Qtr. financial reporting. It continues to be a fascinating company. And an article in the Motley Fool this weekend covers why the much-hyped “Airbnbust” push of 2023 was mistaken. While many independent STR operators rely heavily on the Airbnb system, I’m sensing an increasing amount of Mammoth STR owners are looking at alternatives. Some are reverting back to self-marketing (sole websites), larger social media presences, and signing up with one of the popular “old school” reservation companies in town. Some of this is a byproduct of learning the “quality versus quantity” bargain and understanding Mammoth’s high demand periods. The quality, more high-end and desirable properties can generate equal to or greater income by booking fewer days but holding to their premium pricing. And by doing so attracting a better clientele (guests). The Mammoth STR industry continues to evolve.

Since this was a holiday weekend, I helped provide some filler for The Sheet (as I have done for the past 17 years). My Mammoth Real Estate Q&A column is titled “The Crash of 2024?”  

Noteworthy Sales 

Two Sierra Park Villas units closed, a 1+loft/2 bath for $659,000 and a 2 bedroom + loft/3 bath for $735,000, good price support for these downtown RMF-2 zoned condos.

An off-market lot in the Bluffs closed for $650,000. The action for vacant residential lots continues to impress.

The high sale of the period is a sprawling 7600 square foot home in the Snowcreek Ranch (behind the gate) located next door to the historic Dempsey and Frampton estate parcels. Even though it is now somewhat dated, at $387 per square foot it was probably a steal, but not for anyone looking to downsize.

Other Real Estate News

Now that the Town is looking to vote in November on a 2% general tax increase to support and subsidize workforce housing, there are two other groups, in my opinion, that clearly need to become part of the discussion, and also taxed. These two groups strongly impact the housing demand in Mammoth Lakes, and subsequently the high rents and extreme shortage. I believe they impact housing far more than the supposed recent STR craze (maybe we can get a formalized study for it?). If the need for workforce housing is such an emergency, this new taxing concept needs to be discussed, debated, and implemented by the Town as soon as possible. 

The beautiful thing; this fits perfectly with the drive for Diversity, Equity and Inclusion (DEI), which is an underlying mantra of these workforce housing fanatics. So let’s look at these two groups and how we can implement a tax on them. This discussion also helps in understanding why there is such a housing problem in Mammoth (and it isn’t STRs).

These two groups of local residents can easily be categorized as “trust funders” and “telecommuters”. There are variables within these groups, but to help define the members of these groups we need to create a new category of “certified” local workforce member. That certified word sounds familiar and the concept should be embraced by the Town (they love the control). And not to be confusing, this certification is different from the current certification process that tenants in local deed restricted properties need to qualify for.

I’m calling this new certification a Certified Local Worker. Local residents who actually work and get a local paycheck, or own their own business, or can otherwise prove they really work for the benefit of a local enterprise, qualify for this designation. The industry standard is a minimum 30 hours per week. Retired folks can establish their own local work history (or maybe collecting social security is an exemption? Or not). This new Certified Local Worker designation separates them from the people who need to be additionally taxed because they don’t contribute to the local workforce and yet they are living in a local piece of real estate, either owned or leased. They, like our STR owners and their guests, are displacing our valuable workforce employees. Probably more so.

Let’s look at these tax strategies. Places like Mammoth and the eastern Sierra classically attract the category of “trust funders.” Mammoth is full of them, from seriously wealthy to pseudo bums. Some dabble in things like a little ski instruction, fly fishing guide, or Mountain host. But they don’t struggle to make the rent or pay their bills, or go to a nice dinner or get a massage. Without the Certified Local Worker designation they need to be taxed on their monthly monetary intake, and/or expenditures. They need to be audited. It is only fair. If STR owners have to share their revenue numbers on a regular basis, then local residents who don’t contribute to the workforce should too. They need to pay their share to support workforce housing they are displacing, and maybe on some graduated scale. They have greatly impacted the supply and demand imbalance.

The second category is the “telecommuters.” They need to be taxed equally to the trust funders. Since the advent of the internet, there was buzz about how Mammoth would attract the telecommuting crowd. But low internet speeds kept the rush at bay. But between the impacts of the Digital 395 project which brought true high speed internet, and the Covid experiment, telecommuting has exploded in Mammoth. They are driving purchase demand and rental demand. They, perhaps more than STRs, have exacerbated the housing problem in the last five years. It is only fair they pay for their impact. It is only equitable. 

These telecommuters cannot qualify for the Certified Local Worker certification unless they are working for a local enterprise more than 30 hours a week. Like most of the trust funder group, these telecommuters typically have strong disposable/discretionary incomes. They need to pay their share, or extra.They need to be responsible for the problem they have created. Both groups are quite guilty for this “emergency.” They can afford to be taxed. They need to be taxed.

If the Town is serious about identifying the roots of this housing problem and taxing those who have created it, then it is about time they start discussing the taxation of these two groups that have greatly exacerbated the problem. Otherwise we will know that this is simply an unfair singling-out of STR owners.

Thanks for reading!

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

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