Market Summary –   July 13  to August 3

Single-Family Home Inventory

Pending Transactions

Market Updates and News

Mammoth’s cooler and breezy (almost windy) summer continues, but nobody seems to be complaining. Overall, conditions have been wonderful. Summer crowds are clearly on the light side and without all of the ongoing construction, it might almost be described as sleepy. The Bluesapalooza event wrapped up today and once again is the biggest party of the summer. The popular weekend events at the Village will continue through Labor Day weekend. 

The Ski Area recently announced thay are slowing down the Main Lodge Redevelopment process. I have an extended discussion down below in Other.

The actual tourism “numbers” are begining to show the slow down. The Town is reporting that TOT (bed tax) was basically down 10% YOY in May (and the month of May is a marginal indicator). The Ski Area’s Mammoth Hospitality arm that manages the bookings in the Village, Westin, Juniper Springs, etc., is reporting an 11% YOY revenue decline in July and is anticipating a 13% decline in August. And they are discounting rates and adding perks. So far, Mammoth Lakes Tourism isn’t asking for more marketing dollars, but they will. It is the only solution. The visitors (and second homeowners) that do come have to appreciate the slowdown. This is another chance to find some “balance” in this resort community. Every business should strive for this, including STR owners. Maybe some of our past visitors will come back because of the slowdown.

There are two efforts in Congress to modify the capital gains taxes on primary residences. The current IRS Code Section 121 was established in 1997 (seems like yesterday) and it was a big deal. It has often been described as the “biggest gift the government has ever given”, but inflation has diminished the real value of the $250/500,000 exemption. The “More Homes On The Market” bill has bipartisan support including sponsorship from a Democrat representative from California. This bill proposes a doubling of the current exemption and then indexing it to inflation in the future. Another proposal, the “No Tax On Home Sales Act” would do away with all capital gains taxes on primary residence sales. These proposals are anticipated to gain steam once Congress returns from their summer breaks. It is estimated that this would impact 29 million current homeowners. NAR will certainly be lobbying for these changes. The second bill might help push the first bill. We’ll see, but these modifications could spark the real estate market once again. 

The Town has committed another $6M in funds to the long-planned Cultural center (a 239 seat theater) adjacent to the Edison Theater on College Parkway. Other monies are coming from the Community College District and private donations. The Town is in spend, spend, spend mode. Hopefully the visitor slowdown and lower TOT revenue doesn’t become problematic.

I recently mentioned that I do online searches on anybody I am having real estate discussions with. But one thing I have recently noticed is that many have far less online presence than in the past. Maybe it is the search engines, or maybe they are utilizing the services offered to reduce such presence. Most can’t escape LinkedIn though. Interesting times. Of course, most Realtors strive for as much presence as possible, except for the court records.

Noteworthy Sales

Snowcreek #781 closed for $1,269,000. This is the smaller 3 bedroom / 3 bath 1-car garage floor plan in Snowcreek V. Closed at $854 per square foot. Original condition and with granite counters in kitchen and baths. Backs to Forest Service. So far, Snowcreek values are holding well.

Other Real Estate News

Mammoth Mountain Ski Area recently announced that they are putting the Main Lodge redevelopment project on hold, or pausing, or re-thinking it. My readers (who actually believe me) probably aren’t surprised. The repeated “dog and pony” shows of the past few years were overly ambitious on many fronts—especially economically and logistically. I questioned the re-routing of a State highway, challenging to say the least, and this has proven to be a major obstacle. Their original concept of “scraping” the entire site was surprising then and is probably not making sense at this point either. The concept of an empty canvas is appealing, but losing many years of cash flow at the Mammoth Mountain Inn is alone enough to question this strategy. And as the Alterra collection of resorts has more data and internal interaction, they are far more apprised of market trends. And these trends are changing.

So how does this impact Mammoth real estate? Probably not much in the short run, and probably not much in the long run. If anything it simply delays any additional real estate supply in the market. It doesn’t decrease any skier and snowboarder demand. The Limelight construction is an interesting thing to watch at this point. The original scheduled opening was December of this year. That’s four months from now. I’m guessing, based on causal observation, it will be delayed. Construction just takes so much time here in Mammoth. Intrawest learned it. John Hooper mastered it. Developing a massive hotel at 8,000 feet is an incredibly time consuming project. Doing it at 9,000 feet is daunting.

A recent article in The Sheet indicated that Alterra’s major expansion experience in Deer Valley weighed heavily on the current decision and temperament. They are basically adding a Mammoth sized resort to the existing Deer Valley resort. At other Alterra resorts they are reconsidering the base lodge and village designs. The newer concepts are beyond the “beach.” But the Deer Valley expansion is telling for Mammoth’s biggest problem—Mammoth isn’t mammoth enough for the peak crowds. This is becoming true in many of their resorts. The popularity of the IKON Pass has simply driven the demand for more terrain.

The last time I suggested the expansion of the local ski terrain, several of the environmental crowd challenged my sanity. But I lived through the era of Sherwin Bowl being approved, and the excitement it brought to the community. And then seeing that approval denied by some nebulous east coast decision makers. I also experienced Dave McCoy purchasing June Mountain for the sole intent of linking it with Mammoth via the San Joaquin Ridge and White Wing. I have the relics of such efforts and thinking in my office. 

And again, many things have changed over the years. Ski resorts are expanding into all sorts of pristine areas that were once thought to be forbidden. Relatively speaking, Mammoth isn’t so special. What killed the expansion plans of the past was a focused Sierra Club, powerful and effective local environmentalists, and likely some government officials who were bribed (in this day and age we know this is more commonplace than we thought). But decades have gone by and many (most) of these people are gone. And like I have previously stated, the Alterra people have lobbying connections and abilities in Washington DC that are well established and powerful. 

Quite frankly, the proposed 5-star hotel and a small commercial concentration at the Main Lodge would be far more viable and accessible at the base of Sherwin Bowl. And it would be surrounded by the massive bed base of the Snowcreek meadow. It is far more economically viable. The “mobility” of skiers from town and around the entire resort makes far more sense. There is already a golf course to tie into for summer enhancement. There are also so many dead trees up there that it would be a public safety bonus to clear them out for ski runs. Just a few years ago the Town proposed putting a bike path up Solitude Canyon, so the new resort could certainly have an incredible bike park system (especially now that e-bikes have proliferated).

The longer term plan could be to link Mammoth to June (or maybe it will become a priority?). Or maybe orient it more for exclusive cat or heli-skiing. There were also plans from the 1960s to run lifts deeper down into Red’s Meadow and the backside. Alterra has probably realized that it needs to think bigger than the Main Lodge Redevelopment plan. Mammoth simply needs more terrain.

The quandary is what to do with the old Main Lodge itself. It is the legacy of Mammoth Mountain but is now a massive liability. And it parallels the State highway which now isn’t likely to be changing. In the past the old gondola building was conceived to be good for large gatherings; parties, events, conferences. Maybe it can stay. Smaller “skier services” buildings and a beach still seem to make sense, and are far more cost (and time) effective than large buildings. They could even utilize “temporary” (sprung) tents like at Eagle. Temporary has come to mean 40+ years.

The balance of the project will depend on the future of any potential ski terrain expansion. But if Mammoth’s history is a harbinger of this future development, it will probably end-up being a couple of nice condo-hotel facilities and some STR capable multi-story luxury condominiums. The old Intrawest playbook of short-term development profits AND long-term cash flow through STR management still makes sense—all while the individual owners service the debt and pay for the short-term and long-term maintenance. It would also be the inevitable mix at the base of the Sherwin Bowls (or whatever politically correct name the new resort will have). 

This new delay in the Main Lodge re-development plan is really not surprising. Seeing the Limelight (the first “true” hotel in the Village) nearing completion and the ambitious start of Rockspring gives it some perspective. It was only 35 summers ago that I sat in public meetings listening to the grandiose build-out plans of the (then) North Village. There was no doubt at that time that it would happen fast. But today’s reality is that it will surely take another market cycle or two before it nears any sort of completion. And then it will be time for plenty of redevelopment (again).

Thanks for reading!