Mammoth Real Estate Sales Report – March 3, 2024

Nasty Winds And Blizzard Conditions Close The Ski Area The Entire Weekend?

Market Summary –   February 18 to March 3 

The Mammoth Lakes MLS is reporting 10 real estate closings for the period ranging from a low of $450,000 to a high of $1,500,000. Of the 10 closings, nine (9) were financeable properties and five (5) were closed with financing. The four (4) highest closings were condominiums. There were two (2) vacant lot closings including a $1M lot in Juniper Ridge.  
 
The 10-year Treasury yield was down at the end of the period to 4.18% with the most significant move downward on last Friday. The downward move was a surprise amidst rumors that the Treasury was having increasing difficulty selling longer term notes and bonds. But the real estate industry will certainly welcome lower mortgage rates. The 30-year mortgage rates are being quoted just over 7% and jumbo rates are in the mid 7% range.
 

Condominium Inventory

At the period’s end the condominium inventory is down three (3) to 49 and this includes two (2) properties under construction in The Reserve listed at $1.7M and $2.2M. There were 11 new listings in the period and four (4) have already gone to escrow. There were two (2) large units listed at The Summit in the last few days and both have excellent access to the Eagle lift.  What condos went to contract/escrow in period? They include two (2) Studio units at The Westin, newly listed units at Mammoth Green, TimberRidge, Snowcreek, Chateau Sierra and Sunshine Village. Others included units at Sierra Manors, Bigwood and another at Mammoth Ski & Racquet.
 

Single-Family Home Inventory

The inventory of single-family homes is even at 11 with only two (2) homes listed under $1M.  And what homes went to escrow in the period? They include a $3+M home in The Fairway Ranch (Snowcreek), an Old Mammoth home on Tamarack St. and a home on John Muir Road with significant days-on-market. A vacant lot in “The Ghetto” went to contract.
 

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is up nine (9) to 42 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up nine (9) to 68. Looks like the President’s/Ski Week period brought real estate lookers and buyers into town and some found properties they liked. The improving ski conditions will hopefully continue the trend. Better late than never. Mammoth is set for great spring conditions. 
 

Market Updates and News

A powerful Sierra blizzard blew into Mammoth this weekend and we might be getting closer to an average winter’s snow totals. Today’s snow deposition is all over the place but will get cleaned up overnight. But moderate winters typically turn into spectacular, longer summers. The Ski Area was fully closed Saturday and Sunday which is a rarity. Most visitors stayed away but there are always those who think they are going to be the ones to get the epic powder runs. Others come just to experience a true snow event. Hopefully they came prepared. Pizzas typically don’t get delivered in white-out conditions

The STR debacle is settling down and some Council members seem anxious to get the RMF-2 moratorium ended (April?), while others still appear to be stuck on some imaginary mechanism to create workforce housing out of STRs. And there is already discussion at the Council level (and definitely within the community) that another 2% of taxation could backfire—our guests could reject it and stay away. It is going to be an interesting local referendum debate as we move towards November. We’ll see who the major proponents and opponents are. 

To make the whole thing even more absurd, the Council was reviewing the tenant screening process for the new units (~70) at The Parcel. The property manager’s responses were rather vague about qualifying these new tenants and the validation that they were in fact members of the local workforce. Apparently the Fair Housing laws and income level qualifying are problematic. The messaging was that we can’t even be assured that we are housing members of the “workforce” anymore.

The Council has also started a process to renegotiate the Snowcreek development agreement, and I cover that in the Other section down below.

Mammoth’s condominium projects will scramble in 2024 to comply with California SB-326 that was passed in 2019. Known as California’s Condominium Balcony Bill, it requires all “exterior elevated elements” made mostly of wood products that are more than six feet off the ground must undergo inspections. These inspections need to be completed by engineers, architects or certified building inspectors. These inspections need to be completed by Jan. 1, 2025. The initial inspections may determine that further inspections are warranted. Inspection reports must be delivered to the HOA Board and the Boards are in turn compelled to budget for repairs and complete the repairs. These inspections are now required every nine years. Failure to comply with SB-326 could cause the loss of liability insurance (you can be sure that proof of compliance will be part of the insurance renewal process). From what I have seen so far, these preliminary inspections will cost each owner $3-400.

Meanwhile, during the period Fannie Mae reiterated and reinforced that condominium “project approvals” will increasingly be considering HOA’s reserve study compliance and budgeting (stability), deferred maintenance and inadequate insurance. Projects without current reserve studies and adequate reserves are less inclined to receive approval (FYI, most Mammoth HOAs are reserve funded in the 40 to 60% range).

 Noteworthy Sales 

A Snowcreek Phase V (Fairway Homes) 2 bedroom + loft / 3 bath closed for $1,040,000. It was originally listed for $998,000. This was beautifully remodeled including kitchen, baths, flooring, fireplace, etc.. Buyers continue to value updated properties.

And too, a 4 bedroom / 3 bath at Mammoth Estates closed for $1,250,000. Remodeled but this is a 55 year old property. Buyers love the easy walk to the Village and Gondola. 

Other Real Estate News

During the Town Council meeting on Feb. 21 there was a scheduled “workshop” to start discussion about amending the current Snowcreek development agreement (DA). There was a nice presentation and overview of the project’s past including the prior development agreements. This was important because some of the Council members have no historical perspective. There was some good discussion amongst the Council members about relevant issues that need to be worked on. Last year’s non-operation of the Snowcreek golf course is certainly part of this discussion and negotiation. In fact, the non-operation might have been part of a play to get to the discussion and negotiation to the table. But that is my guess.  

The current Snowcreek developer, Chadmar, wants an extension of the DA from 2030 to 2050, so a 20 year extension. Chadmar also wants removal of language that states there is one day lost of the DA for every day that the hotel and back-nine of the golf course are not commenced (that itself was an odd provision, some how trying to accelerate the natural economic progression).  

The Town wants the front-nine/existing golf course operated in a reasonable summer fashion during the life of the DA (the definition of “operation” is to-be-determined). The Town also wants the ~56 acres of the existing golf course to become permanent open space, and deeded as such, so that it can never be developed into improved properties like more condos or even workforce housing (it is currently zoned Resort). The Town also wants the option for potential additional summer and winter recreational amenities on the ~86 acre back-nine property (that would be assuming any Forest Service exchange related covenants or restrictions would allow for it—nobody on the Town staff could answer that question). 

All of this brings many thoughts to this broker. The term development agreement has a tainted name in Mammoth for some. It was the Mammoth Airport/Hot Creek development agreement that ultimately cost the Town $10s millions. But it wasn’t the DA that caused it. There was a laundry list of mistakes and misfortune which is a book’s worth of stories (which the majority of people have no clue about). But the upfront, performance part of that DA did establish the much needed FBO (Fixed Base Operator) at Mammoth Airport. The Hot Creek Aviation people brought that expertise and today it is a very successful enterprise and absolutely necessary for the operation of the popular general aviation airport at Mammoth. And they are an invaluable interface with the Town staff at the Airport.

The “asks” from Chadmar are interesting, and may be telling. The 20-year DA extension is too little if looking at history. Tom Dempsey secured a 25-year DA in the 1970s thinking that the whole development would be completed by then, including the Snowcreek Ski Area. Here we are more than 45 years later and the largest phase is still undeveloped. The renegotiation of the DA some 20 years ago resulted in the donation (exaction) of the land where the Aspen Village workforce housing projects are next to the Snowcreek Athletic Club. These projects alone are a substantial amount of workforce housing in Mammoth (72 units on five acres). The renegotiation of the development agreement, and the acquisition of that land, was a godsend to the workforce housing effort. 

But Chadmar is signaling that the back-nine and the hotel are not likely to be part of the future. Or certainly not the immediate future. The construction of the back-nine (actually ten) is really questionable. It is a sad irony for those of us who lived through the 25 years of land exchange wrangling that privatized this expansion land. The tiresome and frustrating process alone might have been fatal to those most involved, namely Tom Dempsey and Jim Ognisty. But roughly 10 years ago we also witnessed Mammoth Mtn. CEO Rusty Gregory threaten to close the Sierra Star golf course. He was convinced otherwise, but the reality is that golf courses are attractive for real estate development, but in snowy mountain resort communities they are economically challenging. 

The hotel portion of Phase 8 is a throw-back to the Snowcreek Village planned at the base of the Snowcreek Ski Area on the Sherwin Range and Solitude Canyon. Some readers got rather upset last year when I suggested that this plan could be rekindled. But the Forest Service is allowing ski area expansions into far more sensitive and pristine areas in other mountain ranges. And our “partners” at Alterra have far better connections and lobbyists in Washington DC than Mammoth ever dreamed of. Another 8-10 thousand skier capacity would be nice to spread people out.

The bigger question may be; what is the future of Phase 8 which is the balance of the Snowcreek development? There are no new specific plans that I have seen. Right now it is the increasingly valuable snow pit for the community. If the Forest Service keeps their snow pit closed this may become the highest and best value for the Phase 8 property, at least for now while the future is determined. There is also reasonable conjecture that Chadmar is looking to move on, that a new owner for the property may be in the future. Getting these DA amendments tidied-up may be critical for a future transfer.      

At this initial workshop, council member Sauser expressed the need to make sure the DA can be enforced—like “what happened to the parking garage in the Village?” (I’ll give you a hint, the 1994 revised North Village Specific Plan included a large multi-level parking garage with an ice rink/events center on top, and that plan was created by Intrawest’s own planner.) Indeed, the ultimate enforcement of these DAs can get muddled in time. Especially when there is a revolving door of politicians and Town staff over time.

Enforcing the terms of the DA, like the ultimate housing mitigations provided by developments, are alway a trade-off (and sometimes a strong arm negotiation). Public officials have to weigh between getting the development completed and getting the property tax and TOT base versus getting all of the previously agreed upon terms. Developers are famous for doing 11th hour negotiations on these matters (that’s where the Village garage went). The subject is almost laughable, and the Councils that agreed to one thing are rarely around to deal with the downstream negotiations (and sometimes the developer strong-arm participants aren’t the same either, they bring in specialists for this). This is why so many of these development related housing mitigations often evaporate into our thin air. 

The negotiation of DAs are always interesting to look at—are there other possibilities or opportunities? Or what might we be missing? Is there some new opportunity here? What I’m currently seeing is a developer who doesn’t want to operate a nine-hole golf course, they basically inherited it, and it alone could be a serious obstacle to selling the balance of the project. They probably consider it just unwanted baggage from a bygone era. The Town meanwhile is in emergency mode for workforce housing, especially for the “missing middle.” But the most important part of that equation is the land. The Town had the chance to buy the 24-acre The Parcel (old Shady Rest) for years at a minimal price, and it didn’t (and even worse, they controlled the land use designation and failed to figure that into the negotiation).

So maybe one way to avoid getting strong-armed in the future (again) would be to strike a deal; let the Town take the golf course and try to get a nice carve out from the ~53 acres of Phase 8? Maybe five acres close to Old Mammoth Road (very convenient with great solar). Five acres should be capable of 30-40 “missing middle” type improvements, and it would be a very nice place to live. The future housing mitigations could be adjusted downward and be more attractive to the future developer. The Town could provide a nice, affordable municipal golf course for residents and guests alike—make it another “little jewel” like the ice rink. Recreation is their mission and they have the honeypot for it. And the Town will ultimately want control of the back-nine property anyway whether it ever becomes golf holes or not.  

It would be the opportunity to get some great things now rather than promises in the future. And eliminate the enforcement uncertainty. It is all prime real estate, and might be there for the taking.

Thanks for reading!

 

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

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