Market Summary: November 25 – December 9
The Mammoth MLS is reporting 15 closings in Mammoth Lakes for the period ranging from a low of $111,000 to a high of $650,000. This is two (2) additional closing from the previous period, stable but typical for pre-holiday. The sales data reports four (4) REO/bank owned property closings and three (3) short sale closings.
At the period’s end there are 143 condominiums listed for sale, two (2) less from the previous newsletter. The inventory of single-family homes decreased by three (3) to 43. Residential lots listed for sale pushed at 34. But now there are only four (4) residential lots listed under $200,000.
The total number of properties in “pending” (under contract) in Mammoth Lakes decreased by seven (7) to 76. Of the 76 properties in “pending,” 18 are “contingent short sales” and 11 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) decreased to 96.
Market Updates and News
December is always an interesting time of year for Mammoth real estate. Forget the usual holiday stresses, buyers are always in a giant push to close their escrows before the holidays. Some “need” to close a couple of weeks prior so they can get finishing touches completed and/or furniture delivered. Trust me, it becomes a BIG deal for some. Two years ago we had a REO home due to close before the holidays and there were the usual REO-type delays.
Everybody knew the buyers wanted to be in. So here comes the letter to all the parties from the buyer’s attorney about the “mental trauma” the buyers would suffer if the escrow were not closed prior to the Christmas vacation. We all got a good laugh, including the bank’s asset manager. Luckily, we got it closed and the family was spared the mental trauma. The other rush for some buyers is the anticipation of the holiday rentals. This can be significant revenue. And once it is gone, it’s gone.
We always have to consider how the days lay out on the calendar because after all, escrow officers, loan officers and the like have family and holiday events to attend too (not us brokers, we’re expected to work every day). This year, with Christmas Day and New Year’s Day on a Tuesday, I expect it to get especially messy. There will be 4 to 5 day periods when nothing will get done. And now we have some sellers who have escrows conditioned upon closing before the end of the years, presumably to enjoy the current capital gains treatment. Good thing we’re not busier. I know I have a couple of fire drills left…
Last weekend’s wet storms left the upper part of the Ski Area in very good condition. At town level the storms produced rain but Mammoth’s high elevation paid off again. The entire Ski Area opened last Friday. And the word got out, this weekend’s crowd was substantial for this time of year. With a few more storms predicted between now and Christmas, all of this bodes well for a successful holiday period and beyond. The long range forecast now has snow for most of the Christmas to New Year’s period.
The Town of Mammoth Lakes has essentially completed it’s restructuring and re-budgeting plan to accommodate the payment of the MLLA debt. But this story isn’t over. The Town Council has gutted the law enforcement budget by removing $1.1M from that line item. And of course there has been plenty of fear-mongering. The positions and discussions have cut both ways.
The fact I glean out of it all is that each MLPD officer was costing the Town $192,000 per year. And that is a number that the Council simply feels is too high. And there will be (near) future attempts to raise additional revenues; look for a parcel tax referendum, perhaps a small sales tax referendum, a recreation tax imposed, etc. But so far, the proposed formation of the Business Improvement District (BID) is questionable, too many business people see it as a “house of mirrors.”
Still no substantive discussion out of Washington DC and the “Fiscal Cliff” issues and more specifically the expiration of the Debt Forgiveness Act of 2007. (Again, this Act is what has allowed short selling owners of their primary residence to escape being 1099’d for the mortgage shortfall/debt forgiveness.) Not renewing the Act could certainly motivate distressed local residents (primary homes) in Mammoth from considering short sales (and motivating them towards foreclosure).
In fact, there is already a trend with several longtime Mammoth residents currently facing foreclosure in the immediate weeks who have not even attempted short sales. There is also a trend of many owners who completed loan modifications in the 2007-10 time frame who are now re-defaulting. Basically, real estate values in Mammoth remain seriously depressed from the highs of 2006-07 and many local residents are giving up hope that their underwater positions will be righted anytime soon.
The REO closing of a 1 bedroom / 1 bath at Sherwin Villas for $111,000. This is cheap for a 1 bedroom unit in a nice project. The problem; this project has some of the highest HOA fees in town. This is a classic example of high common area fees compromising value.
The REO sale of a Studio at The Westin Monache for $165,000. Upper floor unit with south facing view (but not overlooking the pool) brings an approx. $15,000 premium.
The sale of an Executive I hangar at Mammoth Airport for $112,000. Motivated seller, cheap price.
The sale of a “Hooper” style home on Ridgecrest Drive for $542,000. This is a smaller 4 bedroom / 3 bath home on a very nice street/location. This home has been on-and-off the market plenty in the last few years with the price drifting down. This home was shown plenty by local agents. Why so long to sell? The 2-car garage was greatly compromised in the original design; maybe get one smaller vehicle in and some good storage. Garages are valuable in Mammoth!
And one last one; the sale of a Mammoth Sierra Townhomes 2 bedroom + loft / 3 bath unit for $235,000. I showed this unit as a “what-not-to-buy” property. The interior of the property needed maintenance/work but the view off the deck and living room was overlooking the back-end of the mobile home park and the common area behind the property was full of trash. But the buyers are in for the holidays!!
Other Real Estate News
A recent article in the business new highlighted the purchase of the ski area Powder Mountain in Utah by a group of young entrepreneurs and conferencers known as Summit Series. This got me thinking about June Mountain; imagine if some Silicon Valley types wanted their own private ski resort that, quite frankly, is just a short helicopter ride from their headquarters. Imagine if they all decided to purchase homes and make June Lake their private enclave. This may sound hair-brained but for the price they could have it all for is a mere drop-in-the-bucket in their net worths.
Maybe I’ll start working on the sale. The people of June need to be careful what they wish for… But the Internet service will definitely have to be improved.
Thanks for reading!
** Closed sales data is compiled from in-house files and public records.