Mammoth Real Estate Sales Report – March 31, 2024

Spring Breakers Get A Big Dose Of Sloppy, Wintry Weather!

Market Summary –   March 17  to March 31 

The Mammoth Lakes MLS is reporting 13 real estate closings for the period ranging from a low of $360,000 to a high of $1,515,000. Of the 13 closings, all were financeable properties and seven (7) were closed with financing. The closings included three (3) Westin Monache units and three (3) Snowcreek units. Three (3) of the four (4) closings over $1M were single-family homes. The high sale was a brand new Creekhouse unit (they are almost all gone).   
 
The 10-year Treasury yield was down at the end of the period to 4.206%. The 30- year conventional mortgage was being quoted around 6.9%. The industry called last week “a record setting week for boredom.” Loan applications remain at record lows. Based on the recent crowds at Mammoth, many families were on vacation last week, and they may have included many of those in the lending industry.
 

Condominium Inventory

At the period’s end the condominium inventory is up five (5) to 54. That includes two (2) under-construction townhomes at The Reserve. There were 14 new listings in the period and two (2) have already gone to escrow.  What condos went to contract/escrow in the period? They include a 3 bedroom at Sierra Megeve, a 3 bedroom at Lakeview Villas, and 1 bedroom units at St. Anton and Juniper Springs Lodge. All winter/ski-oriented properties.
 

Single-Family Home Inventory

The inventory of single-family homes is up two (2) to 12, but one was on the market before and simply took a 30-day respite to reset the days on market (DOM). One (1) of the listings is under construction in The Reserve— a “single-family home” in the middle of a condo project. Two of the single-family closings at ~$1.2M are really marginal properties in my opinion, incurable defects galore. But buyers and their agents seem anxious to close on a property. I told some prospective buyers this week to wait until summer— there is typically more inventory and you can see what you are buying. In the coming new era of buyer representation, my longstanding “don’t buy crap” philosophy may become more appreciated. Maybe it will become my new marketing theme. 
 

Pending Transactions

The total number of properties in “pending” (under contract) in Mammoth Lakes is down six (6) to 35 at period’s end. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down six (6) to 57. The condo listings are coming and going based on desirability and value. The single-family inventory is limited and getting stale. The year 2024 will be very different from 2023. The snowpack should melt-out in a reasonable fashion this year and make properties very marketable in the next couple of months. But I’m expecting fewer seriously motivated sellers than last year. This was a moderate winter without heavy snow-related expenses yet enough snow for plenty of enjoyment. The owners with STR properties should be satisfied with gross and net income despite the slow start to the winter.
 

Market Updates and News

The first round of spring break crowds certainly didn’t get the famous Mammoth spring weather and sunshine they were hoping for, but Easter is early on the calendar this year. But the mid-week crowd was here last week regardless. I observed numerous groups who were clearly unprepared for winter-like (and even worse, wetter) weather. Mammoth can be quite unpredictable in early spring. The Ski Area will stay open through Memorial Day weekend, but they have plenty of work to do to catch up on their improvements schedule. They have work to complete at the new Chair 16, Chair 1 will be similarly replaced, and there is plenty of completion work at Woolly’s. 

Ted (Jack) from The Sheet called me last Sunday to see if I had a column for this weekend’s edition. This was rather unusual because I’ve met my holiday edition deadlines for the past 17 years. My guess is that he was planning to be out of town this weekend and was eager to put the edition to bed. He wanted to know what the topic was (he never asks) and I replied “the topic of the day and the coming election.” He responded, “the NAR settlement and will Trump overturn it?”   Huh…? Clearly, we have different mindsets. The Q&A is “The RMF-2 Moratorium And Get Out And Vote!”   In my current business world this is still the question of the day. Many property owners remain pissed. And the average worker and business owner are oblivious to the real impacts.

I have previously commented about the NAR commission settlement, but since it is in the news flow; that famous New York broker gal that is all over TV stated this week that the settlement is “not a big deal” and that it has caused more confusion than anything else. Again, even though some people think they see the end-result of all of this, only time will tell. The real estate coaches (I don’t have one) are “selling their book” with new seminars for agents—they need to be more polished as “buyer representatives” and explaining their value. Clearly, these coaches are more valuable than ever. 

Other industry pundits are beginning to see it the way I have seen it all along—this is going to take 12-18 months (or longer) to sort out. For now, I’m waiting to see how it evolves including how CAR (California Assoc. of Realtors) is going to advise us both legally and with new “standards of practice”. These will include, quite importantly, new standard forms for future use (which will certainly evolve). These CAR forms are the industry standard in the majority of California real estate transactions. They will likely offer a variety of buyer broker compensation options. And dual agent options. New listing agreements will allow for sellers to make “concessions” to buyers including dollars to pay their agent commissions. And the lenders are going to be involved with all of this.

The real question is what will the sellers do? Will they continue to offer buyer broker compensation as they have for decades? Or will they have different ideas. Us brokers and agents are going to be giving them advice, and what they will decide is unclear to me at this time. And what happens if their property is being ignored in the market?  I have some sellers right now that aren’t getting showings—and they are offering buyer-broker commissions. Offering a buyer broker commission may become the new competitive advantage. But we have to get to that bridge. It will take time before the industry and market deem the new “customary” again. Or maybe there will be no new customary. It could become even more confusing (and maybe opportunistic?). 

I was out showing property Friday morning to some people who contacted me the night before. I started thinking about this “jump in the car” mentality of the past decades. Come July we will need mandatory, signed buyer broker, agency and compensation agreements with a buyer before we can ever show them a property. This whole, new concept is going to change the mechanics of the process. And maybe my attitude towards working with (potential) buyers, and certainly before I let them drain me of my knowledge. I’m not really sure how I am going to react, it is a big stay tuned. And interestingly, the older, more experienced (and less desperate!) brokers are bound to have a far different attitude about all of this than the hungry, hard-selling agents. As I’ve said previously, the concept of “buyer beware” becomes even more profound. Maybe buyers will become more careful in selecting their agents in the future?   

Other critics are seeing this as the chance to repair NAR’s “toxic” culture. Well, they are based in Washington DC, where everything appears toxic these days (that’s my bike on the far right).

Meanwhile, AirDNA has made significant website changes and it is no longer giving me the information that I want. It seems they have sold out to other interests. I won’t be subscribing any more, I will find other resources. I did notice they currently had Mammoth occupancies at 51%. As long as I can remember Mammoth has been reported at 54-55%. We’ll see if the Town’s numbers are ultimately consistent with this, if we can trust their numbers. Mammoth Lakes Tourism is pressed to prove their worth.

The Mono County Assessment Appeals board had an interesting appeal this last week. The taxpayer purchased an unbuildable lot from the subdivision HOA and the new assessed valuation was in dispute. This subdivision in south Mono County was constructed by one of my former broker-associates (and mentors). The lot was created to protect some rock outcroppings and a seasonal stream course that eventually has significant deer migration as the grasses grow later in the summer. In the mid-1990s we brokered deals with the DFG for the purchase of land and easements for deer migration in this area.  

While in Bridgeport for this hearing in the historic 1860s built courthouse building, I noticed that the clocks in the Supervisor’s chambers and conference room were all broken. Clearly, the place is stuck in time. But the old courthouse is certainly worth a visit.

Noteworthy Sales 

Two Westin Studio units closed for $465,000 and $475,000. This is a new, multiple sale valuation range for these popular units. These units were approaching almost $100K in gross rental revenue in 2019 (pre Covid). Today, they are almost coming back to that amount of revenue. But they will compete directly with the 150 Limelight hotel rooms due in late 2025.

A beautifully remodeled 3 bedroom / 2 bath / 1 car garage townhome in the Chateau Sierra project closed for $879,000.  This is an RMF-2 zoned condo in a 50+ year-old project. The units in this project have served as valuable, local resident (“missing middle”) type housing for decades. Buyers could have purchased in this project for less than $300,000 just 10 years ago. I know, I remember showing these units to local residents back then and many turned their noses up at these properties. 

Other Real Estate News

The news last week of State Farm canceling 72,000 insurance policies in California should be somewhat alarming to Mammoth property owners. State Farm insures a large amount of real estate in Mammoth including dozens of condo projects, and some for decades. The local State Farm office was a prominent player in Mammoth when I moved here in the early 1980s. My vehicles have been insured with them for over 40 years. So far, I have not heard of any local policies being canceled. But insurance continues to be a problem for real estate owners all over the country.

I don’t profess to be an insurance expert, but here is what I do know. There seems to be an uneven hand, especially in the condo projects, about policy availability and pricing. But the claims history is hard to know. Some HOA boards are quick to make claims and others are more reserved, weighing policy risk and cost versus claim return. The winter of 2024 didn’t help. In theory, much of the damage occurred while Mammoth was in a declared state of emergency. The local insurance brokers stated clearly that claims made during the state of emergency would not be detrimental to the policyholder’s standing. From what I can tell, there were claims paid on almost every condo project in Mammoth in the last year. 

But the unevenness of policy availability and pricing remains. There seems to be no rhyme or reason. Some HOA projects have had to make major special assessments to cover new policies. One that is odd is the Westin Monache. That building is all steel and concrete and has fire sprinklers throughout. The fire risk seems minimal, so the risk must be on the liability side. Other older and larger condo projects have been declared as “underinsured” by lenders and others. The HOAs have had to scramble to get new or add-on policies. Other projects are now (oddly) using their insurance coverages (or lack thereof) to potentially curtail STR activity, although there is no apparent link from one to the other (stay tuned).

I’ve personally sat on three HOA boards in the last five years so this subject is one that is always in the back of my mind. All of Mammoth sits in a designated Fire Hazard Zone. But the insurance companies also weigh the amount of fire protection efforts, equipment and crews that are in the immediate region. For those who don’t realize it, they are substantial. But one thing that is surprising to me in the last few years is the tolerance by insurance companies of HOA projects (and single-family too) of structures with wood shake roofs. Some of these roofs are 30+ years old. Many older projects have reroofed with more fire retardant materials including modern ice dam protection.

This risk concept is something I try to counsel buyers about. Old wood shake roofs are scary for potential fire but also a major replacement expense that is bound to come in the near future. Many of these HOAs aren’t fully funded for these roof replacements. And I have to think that as this insurance crisis potentially worsens, the replacement of these shake roofs will become mandatory. 

The more modern structures are often utilizing cement fiber siding and fire sprinklers. These features also appear to be favored by recent policy renewals, but not in every case. More inconsistencies. 

A recent article about the State Farm/California pullout was blaming the Insurance Commission and Governor Newsom for the problems, not allowing insurance carriers to adequately raise rates. The article discusses the California Fair Plan which is how many Mammoth property owners are securing insurance, usually with add-on coverage by one of the major carriers. Perhaps this crisis has to get bad enough before the State will help resolve it. 

In the meantime, I get inquiries about what to do with expiring or canceled condo “walls-in” policies or single-family home policies. My recommendation is “shop.” That is the only answer. Mammoth has very good insurance brokers but I also recommend those in Bishop. For some reason Bishop has some very good insurance brokers who seem capable of solving problems, and they know the region. Just do an online search. I’m sure this will be an ongoing saga.          

As an aside, I reached two life milestones during the period; I celebrated my 65th birthday (I moved to Mammoth when I was 22) and have now qualified for Medicare—yippee!   I also marked 45 years in remission of stage-3 lymphatic cancer. It’s good to be alive. 

Happy Easter!

Thanks for reading!

 

 

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

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