Market Summary: March 23 – April 6
The Mammoth MLS is reporting 11 closings in Mammoth Lakes for the period ranging from a low of $233,200 to a high of $4,500,000. This is basically the same volume as the previous two week period (and the one before that). The local market is plugging along, slow but steady. Of the 11 closings, all 11 were technically financeable properties and seven (7) of the 11 were financed. During the period there were NO REO/bank owned property closings and one (1) short sale closing.
With the California Homeowners Bill of Rights now 15 months old it appears the log jam it created is beginning to break loose. The distressed property market is coming out of hibernation. The evidence here in Mammoth is several new short sale listings in the past two weeks and in increase in REO related work.
At the period’s end there are 111 condominiums listed for sale in Mammoth Lakes, that is up 10 from the last period. Most notable are some new Snowcreek Phase 5 (smaller) town homes and Lodges units. The asking prices are moving upward on these popular units. We’ll see how quickly they go to contract, or if more similar units come to compete. Two summers ago a buyer could pick from several. Last summer there was virtually no inventory.
Single Family Inventory
The inventory of single-family homes is down four (4) to 51. And the downward movement is because of some new contracts, but also some expired listings. The low-end of the single-family market remains dismal with serious compromises in locations and structures. But the $1M+ John Hooper spec homes are selling well.
The total number of properties in “pending” (under contract) in Mammoth Lakes leaped up 18 to 59 for the end of the period. Of the 59 properties in “pending,” five (5) are “contingent short sales” and 35 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) increased 10 to 81. Clearly, a little spring sales push. That would be normal for this market for this time of year. This serious drought winter is still playing an unknown roll in the local real estate market.
Market Updates and News
The timing of the last week’s kick-off of the MVP sales could not have been better. It coincided with the best snow and ski conditions of the year. As Intrawest used to say “selling is the transfer of enthusiasm” and there was plenty of ski enthusiasm this past week. Spring-breakers and locals were reveling in it. The coverage and snow quality are currently very good. The weather has been cool keeping the conditions nice. But that will change with warmer temperatures forecasted this next week. We’ll have to see if the conditions hold for awhile. At least we have a little more water on the mountain tops.
Speaking of the MVP sales, there was a frenzy of initial buyers seeking the $200 resort credit offered by the Ski Area. It will be interesting to know (if we ever do) how many MVPs they will sell this year. But for now the resort has some cash flow to make payments and to float on. And with two different credits offered MVPs in the past couple of months, one has to wonder if this is the next micro-trend in Ski Area accounting; sell more passes (especially since the sheep go crazy for the credits), issue more credits as enticement, top line revenue is juiced, all of it gets muddled to the bottom line but the enterprise gets increased value based on revenue. Sounds like time for an IPO!!
The Town Council and County Supervisor races for the early June election are starting to heat up. So far it is all noise with no real meaningful dialog. But the candidates already seem to have campaign budgets to spend. The local newspapers are already full of display ads for the candidates. And these are pre-paid ads. And the crappy street signs are starting to show. Thankfully, we have candidates and competition, but let the trash-talk begin.
So far, the best quote is from former long-time Town Councilman Kirk Stapp who is running for County Supervisor. From an article in The Sheet referring to the Council’s handling of the Mammoth Airport, Stapp said, “looking back it was really sad the way the Council was manipulated.” I sure hope someone in the media has the guts to follow-up on that one…
Last Wednesday the National Assoc. of Realtors (NAR) released their statistics and survey on vacation homes for 2013. I’m sure it was off-the-radar of most of the agents in Mammoth but there is some interesting stuff. Sales of vacation homes increased almost 30% in 2013 over the previous year. Even better; second-home purchases made up their biggest share of the housing market since 2006. But the gross number of those purchases was only two-thirds of the volume in 2006.
BUT what is most interesting is a newer trend; “NAR found signs that more people are treating vacation homes at least in part as investments. The median buyer surveyed plans to own the house for six years, down from 10 years in the 2012 survey, and 5% of vacation home buyers have already sold their newly bought house, with 9% planning to sell it this year.”
And finally, as has been noted here in reference to the Mammoth market, “Growth in the equity markets (stocks) has greatly benefitted high net-worth households, thereby providing the wherewithal and confidence to purchase recreational property,” said Lawrence Yun, NAR chief economist…
Seven of the 11 sales during the period were condos under $320,000, so quite un-noteworthy. More evidence of prices going up, and prices nudging down, and some staying flat. But I always cringe when I see buyers paying high prices for properties with serious incurable defects. But so be it, they weren’t my clients.
The big sale of the period was an Old Mammoth Road corridor commercial and residential complex. The sale was $4.5M cash. I got a chuckle; I lived in one of these apartments in 1982-83. I thought it was old then. Nothing really special about this property except a decent return-on-investment, assuming that it is realistically calculated. IT IS good to see institutional-type investors with confidence in Mammoth Lakes… Or maybe they know something that I don’t know?
The sale of Grand Sierra Lodge #1302 for $420,000. This is a nice corner 2 bedroom / 2 bath unit in the premier project in the Village. This unit was on the market for a few years. I showed it soo many times. The problem with it? It overlooks the entry to GSL along Forest Trail. It’s also pretty close to the main vehicle entry to the entire underground parking garage of the Village. And the main trash receptacle and dumpster for the Village.
The sale of 505 Grindelwald at $559,125 cash. This smaller 3/2 home with a 2-car garage was nicely kept (but older) and located on a corner lot in The Knolls. It was originally listed at $505,000. Sold for $406 per foot.
Other Real Estate News
According to California Association of Realtors statistics there is a year-over-year trend of decreased sales volume and increased listing inventory in most California markets. There are exceptions. As noted in a recent Los Angeles Times article, wealthy Chinese buyers are pushing some markets beyond the “past boom-era peaks.” One Chinese American banker says the Chinese buying spree sometimes borders on recklessness. From this article and all reports it is simply crazy. “People are getting money out of mainland China and sticking it here,” said the president of the San Gabriel Assn. of Realtors.
Meanwhile, I read where they were beginning to sell bags of “mountain air” to the residents of highly polluted Beijing. So I’m wondering when we’ll see a bus full of Chinese investors pulling into Mammoth. Maybe Rusty should be working on that.
Thanks for reading!
** Closed sales data is compiled from in-house files and public records.