Market Summary: July 29 – August 12
The Mammoth MLS is reporting 19 closings for the period in Mammoth Lakes proper from a low of $89,000 to a high of $695,250. The sales data reports only 2 REO/bank owned property closings and 4 short sale closings. REOs and short sales, aka “distressed” sales, represent a decreasing amount of total sales.
At the period’s end there are 168 condominiums listed for sale, an increase of only one. We’ll note the increase but the condo inventory remains historically low for this time of year. The inventory of single-family homes decreased to 59. Residential lots listed for sale is a flat 45.
The total number of properties in “pending” (under contract) in Mammoth Lakes decreased again for the second straight period to 68. Of the 68 properties in “pending,” 31 (now less than half) are “contingent short sales.” The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) decreased again to 87. And, an unusual amount of properties came “BOM” or back-to-the market during the period with no clear sign as to cause. Maybe just coincidence.
Market Updates and News
Call it the dog days of summer, or the summer doldrums, or simply the lack of new and/or quality inventory, but real estate activity has slowed in Mammoth. But we did have a pretty good spring and early summer, and we’ve been slow at mid-summer before. The “anticipation of winter” selling has not kicked in. Or maybe it is election year uncertainty, or the general economics, or the Town’s bankruptcy. There seem to be plenty of interested buyers, but they just don’t seem to be finding the property they like or the “deal” they think is appropriate. Local agents have experienced a rash (pun intended) of property lookers who seem to have the impression that the Town’s BK has created panic selling in the market. There simply is no panic selling, forget it.
Seller motivations remain in the entire spectrum of “normal” to the Mammoth market. If anything, more potential sellers appear to be inclined to wait until the bankruptcy is settled (or wait until Vail buys the Mountain).
The Town and MLLA were in BK Court mandated mediation this week in Los Angeles. The press was rather quiet about it all and there weren’t any snide remarks published from any of the MLLA partners. As one insider recently said to me, “Nobody is going to like the outcome whatever it ends up being.”
More and more owners/sellers who find themselves deeply underwater are turning to short sales. It has become “the right thing to do” for many, even for many second homeowners. The true “hardship” requirement of the past is now met by simply owning real estate in the past ten years. These owners and sellers are moving past any moral dilemma. People who are truly financially sound are qualifying. In this era of bailouts for everyone, why not? It has become the American way. I used to have my own moral dilemma about all of this, but now I just want to help people do what the system allows, and move on with their lives.
From the “just when you thought things were stupid-crazy” department… in the past two weeks this office experienced multiple circumstances of “blind” auction/investor buyers who might be the start of the latest trend. But the compelling question is “how many mistakes can these people make before they decide this is not a profitable strategy?” One buyer/new owner had an out-of-area title report that may have been the most screwed up (and erroneous) title report I’ve ever seen.
Something like this can quickly turn potential profits into big losses. No wonder they “won” the bidding. They didn’t buy anything close to what they thought they bought… Another was from out-of-state (Texas) and had closed on a small home up north. Again, bought the property “blind” through an online auction without doing any homework. Then they were upset to find out that property wasn’t worth what they had paid for it. (There is a reason bank-owned properties end up in an online auction, and it isn’t because they are experiencing multiple offers and a natural bidding war.)
And they were a little surprised that I didn’t want the listing… And one potential buyer was so excited about a particular property and his potential profit that he was ready to get in his car and come see it. But when he asked, “Is Mono County north or south of Humboldt??”, I told him maybe he should buy a map before he starts buying real estate. I don’t know what to think about this trend. It might be a great way to dump crappy properties for some. But it just shows that new real estate mania is cropping up. I wonder if they’ve ever shoveled deep snow.
More and more non-conventional lenders are jumping into the financing of the condo hotel units. Most of this falls into the category of “soft hard money” (?) which isn’t so much like traditional hard money but still allows buyers to get decent long term financing on these units. The terms, costs, and conditions are steeper that conventional financing but this trend could drive more buyers into this segment of the market. Meanwhile, properties like the Westin Monache continue to show good rental numbers, so maybe we’ll see increased demand (and prices) for these properties.
Of the 19 closings during the period, plenty of ho-hum transactions. Again, I’m not seeing a definite trend (up or down or?) in the market. Well, maybe one; there continues to be strong demand in the very low end of the condo and home market. Half of the closed sales were under $215,000. Buyers continue to clean out the low-end of each segment of the market. Otherwise, we are just muddling through. But a big part of it is just the lack of quality inventory.
The closing of Sherwin Villas #44 stands out. Why? This 3 bedroom + loft / 3 bath condominium sold for just $175,000. That is right around $120 per foot. That is cheap. But the common area fee hovers right around $1,000/month. High HOA fees are clearly affecting condo values. But the buyer made the decision that even though the fees are high the property is being sold so inexpensively and the property is a solid winter AND summer rental AND suits his family’s needs that it all starts making sense.
The sale of a 2 bedroom / 2 bath at Sunstone for $345,000. This is a good buy because it has a big view AND Sunstone is the only condo hotel property currently with conventional financing. Sunstone is like the mellow sister of Juniper Springs Lodge; it does not have all the front desk hustle and bustle of JSL, it has a nice large, airy “hearth room” (common area room) like a hotel, AND it really has better access to the ski runs.
Other Real Estate News
Last week/weekend Mammoth was absolutely packed to the gills with visitors. The main draw was the Blues and Brews but people were everywhere. The crowd level was reminiscent of the week between Christmas and New Year’s, except without snow and ice on the roads. If headliner music events in Mammoth continue to grow like this one, the summer dynamics will change once again. Local businesses welcomed the volume of visitors.
Last night was the first ever Mammoth Margarita Festival in the Village. The music, tequila tasting and specialty margaritas were all excellent. This was a well organized and executed event. There was a big, diverse, but well-behaved crowd. Look for this event to grow. Maybe they should do it monthly.
From Paul’s Broker Observation File; as transaction velocity (and commissions) decline in the Mammoth market, a nasty little trend occurs. Some remaining but financially stressed agents become pushy and hard selling agents. Mix that with low inventory and frustrated buyers and some buyers can end up purchasing the wrong or substandard property. I’m see us in this type of era again. Apply the famous real estate axiom; Buyer Beware.
This newsletter will return on Labor Day weekend, time for this boy to go hunt for sashimi, can’t wait.
Thanks for reading!
** Closed sales data is compiled from in-house files and public records.