Market Summary: April 12 – April 26
The Mammoth MLS is reporting nine (9) real estate closings in Mammoth Lakes for the two week period ranging from a low of $161,000 to a high of $720,000. That is down another three (3) from the previous period. Of the nine closings, all nine were technically financeable properties and eight (8) were purchased with new loans. One of the period’s financed closings was a Village condo hotel property, so an increasing number of condo hotel purchases are utilizing financing. There were no REO/bank owned property closings and no short sale closings reported. My company was assigned a new REO property this past week, so that part of the market isn’t completely gone.
At the period’s end the condominium inventory is up 12 to 174. There were 18 “new” condo listings during the period. Four of the new listings are 1 bedroom + loft / 2 bath units at Bigwood and they are priced from $235,000 to $275,000. They will start competing with each other. We’ll see where the pricing goes. Bigwood is a 45-year old project that has been special assessing for major improvements including a new pool and spa and patio area, new plumbing, new roofs, and new siding. The project really needs this. I was on the project a couple of times this past week and there is construction going on all over the place. The weather has certainly allowed them to get an early start.
With condo inventory on the increase there should be better selection for prospective buyers this summer. But the increase will mean sellers will need to be smarter about selling; that includes pricing, property preparation, marketing and negotiating. Read my recent column about mistakes sellers make.
Single Family Inventory
The inventory of single-family homes is up one (1) to 61. There are seven (7) homes listed under $500,000 and another six (6) listed between $500K and $600K. Most have been sitting on the market for some time. Plenty of stale inventory in this part of the market. There are 36 residential vacant lots on the market ranging from $119,000 to $1,995,000… Oddly, there were numerous and unusual straight cancellations of listings during the period–can’t really put my finger on why… a rather strange phenomenon.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down another seven (7) to 39 at period’s end. Of the 39 properties in “pending,” six (6) are “contingent short sales” and 18 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down seven (7) to 61. The downward sales trend/volume continues. The evaporated ski season and the radically slowed velocity of visitors to Mammoth is likely to blame. My monitoring of website traffic and real estate inquiries still shows a steady flow of interest in Mammoth real estate. The potential buyers simply aren’t coming to town to recreate. At least for now. We will welcome summer.
Market Updates and News
In the last newsletter I stated “Local businesses will be glad to see fisherman show-up in the upcoming weeks.” And they were here this past weekend showing in condo projects, in restaurants and bars and certainly in VONS. And the best news is that the weather is telling us we may be heading back to a normal wet pattern. I’m no weatherman but the age-old tradition was that it always snowed on the opening weekend of fishing. It almost never failed. And that was consistent with wet winters. We woke up to a few inches of new snow Saturday morning.
The Mammoth news flow is quiet but there are some undercurrents. The Mammoth schools were out this past week so many local families were gone on vacation. The Town will make a public presentation this coming week (Weds. 4-29 @ 5pm) at Mammoth Creek Park to explore the possibility of moving the ice rink to that location. The Town’s ownership of land at the Park extends straight back beyond the existing children’s play area. And that is the proposed site for the rink. The area adjacent to the creek is Forest Service land.
The cost of moving the ice rink from the (leased) school district property is expensive enough, but to give it a permanent home in a prime location may bust the budget. In its current location it is surrounded by chain link fencing and appears more like a prison yard than a significantly expensive resort amenity. They also want to put a roof on it to make the rink more viable. That will add to the cost.
Some 20 years ago as a Planning Commissioner I spent considerable time visiting and researching publicly funded recreational amenities in resort communities. With smaller demographics and limited budgets, resort communities like Mammoth are compelled to make facilities multi-purpose and mixed-use. Otherwise their expenditures are very difficult to justify. The Town of Mammoth Lakes was heavily campaigned many years ago by a small faction that wanted an ice rink. The Town eventually caved to a small interest group and today has something they can barely afford.
Today, to warrant moving the ice rink to one of the Town’s most choice real estate assets (Mammoth Creek Park), they must do it on a higher (and more expensive) level. The facility will need to be aesthetically pleasing but also have some utility during the non-skating months. It just can’t sit there all summer on a prime summer location. The roofed facility could further and host a variety of events in conjunction with those that already occur at the Park. Or maybe host a variety of new events.
But with that will create a need for more parking, so are they going to end up paving the balance of the Park? Right now the ice rink has a large parking lot and shares additional parking with the library. We’ll see. The Town needs a corporate sponsor like the big stadiums and arenas…
A recent vacant lot listing showed the owner/seller was the original owner–from 1968. And I have also been working with the son of an original owner of the same vintage in the same subdivision. Imagine owning a vacant lot for 47 years and never doing anything with it. These lots are worth ~$200-220,000 today. They probably paid in the ~$8,000 range in 1968. At the peak of the market the might have been worth $400,000.
There are some very clear and earnest “flip” attempts sitting stagnant on the condo market, with a concentration in the Canyon Lodge area. The units were all purchase in the last two years and have been substantially remodeled. Two of them, located at Sierra Megeve and Snowbird, were gorgeously and expensively remodeled from top to bottom. These were six-figure plus remodels. But seriously inflated pricing and a drought winter are stalling the potential windfalls. Another is a cheap remodel of a lower priced unit.
I’ve done some “back of the envelope” math on that one and it is getting to be “crunch time” for that specuvestor. And the Canyon Lodge oriented buyers aren’t likely to be back in the market until after Labor Day… Nicely remodeled and improved condominiums have sold very well in the market the past two years. There has been a small bit of profit for these sellers whether they were intentional flippers or not (some clearly weren’t). But the true flipping game in Mammoth is tough. The buyers have exceptional information at their finger tips. They seem tolerant of sellers making a reasonable profit but not an obscene one. Stay tuned.
Three home sales including one at $477,000 and one at $500,000. These two lower-end sales have some very interesting disparity in this broker’s mind. The home at $477,000 is in a lower-end neighborhood, old and very worn out; I personally wouldn’t pay $377,000 for it. The $500,000 house is in a much better location and a more modern home. These new owners will probably do a substantial remodel on it, but you really could have moved right into it. The real question is if you put an equal amount of dollars into each one of them, where will you be? It was $23,000 well spent for Buyer #2…
A ho-hum 2 bedrooms + loft / 2 bath unit at Seasons Four sold for $295,000. We’ll see if these kinds of numbers hold for this popular and abundant floorplan for the balance of the year. They all need major fireplace renovations under the new Town ordinance. These are generally tired units with very little storage.
A 2 bedroom / 2 bath condo hotel sale at White Mountain Lodge in the Village for $420,000. This is a premium price for what is considered a marginal location in the Village: noisy location overlooking Minaret Road (especially on the second floor). But the purchase was financed. The ability to finance condo hotel purchases in the Village may lift values. We’ll see.
Other Real Estate News
Affordable housing issues are creeping back into the limelight in Mammoth Lakes; specifically Mammoth Lakes Housing (MLH), the local government sponsored housing enterprise, and their requirements on developers to help fund the enterprise through impact fees. MLH was derived out of the 1990’s planning efforts and the clearly recognized need for helping local (and future) residents afford housing as the resort expanded and became more expensive.
The efforts of MLH has produced a wide variety of “deed restricted housing” units that are available for rent and for purchase. The prospective owners and tenants have to be “certified” meeting certain residency, employment and income requirements. There are also low (and no) interest 2nd mortgages available to help bridge purchases. The enterprise has been very successful, and maybe too successful.
In the late 2000’s there were dozens of new units available for local residents to purchase with attractive financial aid. But the problem was the real estate market was crashing and nobody wanted to purchase. Eventually the units were converted to “open market” properties; the deed restrictions were removed and anybody could purchase them, even second homeowners. Meanwhile, development dried up and the money from developers (“exactions” as they are known to planners and “extractions” as they are known to developers) dried up too. No new “affordable” units have been built or are in the pipeline.
MLH has carried on but has become another bureaucratic “make-work” program. They have to maintain up-to-date housing documents/Housing Element of the General Plan, and prove they are doing something. And of course they are out to pounce on any developer. In turn, the developers are arguing that the excessive housing contributions/dollars are the incentive NOT to develop. And that MLH has actually saturated the market (more supply than demand) by evidence of the dozens of units that had to be released to the open market.
Even worse are the many local residents who point to all of the Escalades and new trucks in the parking lots of our local Section 8 housing. And nothing like a few drought winters and declining cash flows to stir-up the pot. There are some interesting public meetings planned in the near future. The bureaucrats (and bleeding hearts) of MLH, the developers, and the local residents for-and-against shall all have their say. It should make for some good entertainment.
Thanks for reading!
** Closed sales data is compiled from in-house files and public records.