Market Summary: February 9 – February 23
The Mammoth MLS is reporting 13 closings in Mammoth Lakes for the period ranging from a low of $140,000 to a high of $1,965,000. This is one (1) more closings than the previous two week period. Of the 13 closings, 12 were financeable (conventional) properties and eight (8) of the 12 were in fact financed with conventional loans; more evidence that cash buyers are becoming fewer in number in the Mammoth market. During the period there were no REO/bank owned property closings and one (1) short sale closing.
The local market continues to plug along at a slower but steady pace. Some of the recent high-end sales are having appraisal issues; the properties are simply not appraising for the selling price. And the appraisers aren’t playing along. But now they have some high-end closings (during this period) in the $500+ per square foot selling prices.
At the period’s end there are 103 condominiums listed for sale in Mammoth Lakes, and that is an increase of 13 from the last period. This is not typically the time of year to see new listing inventory in Mammoth. It usually starts coming to the market after the ski season; normally May, June and July. If this is a trend then Mammoth may be back to “normal” inventory levels by mid-summer. During the period there were new low-end listings including REOs. There are now 14 condo listings under $200K. My hunch is that some of the new condo listings are seller reactions to the combination of low inventory and low rental income.
Single Family Inventory
The inventory of single-family homes moved down a couple to 43. More new listings in the sub-$600K range as well as new escrows in that range too. The inventory includes two new “spec” homes being built at Graystone at Sierra Star. My guess here is there is “shadow inventory” of homes–just waiting for winter to be “officially” over and they will come to the market. Other owners have to watching (and hoping) to see when they are “above water” so they can list.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down one (1) to 40 for the end of the period. Of the 40 properties in “pending,” six (6) are “contingent short sales” and 12 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is a push at 65.
Market Updates and News
President’s Weekend and Ski Week brought some visitors to town but nothing like the normal volumes. Skiing was and is good; not epic like a normal February, but still very enjoyable. The main runs are very good except for the Eagle/Chair 9 side and there is plenty of skiing to be had up on top. This weekend was marginal for crowds. The weather has been great but it is the wrong weather.
Major precipitation is forecasted for next weekend and let’s hope it happens and continues. The last snowstorms and a bump in visitors has glossed-over the inevitable pain that many businesses and local residents will experience in the coming months. The financial damage is done, but now the State desperately needs water. Or else there will be more pain.
With all of the anticipated mortgage delays and problems related to the Dodd-Frank regulation, the major lenders are funding loans in Mammoth in near record time. The local Wells Fargo office has recently closed transactions for me in right around 25 days. Looks like the lenders that enacted the new policies many months ago (and ahead of time) are able to perform quickly without snags… Or is the loan volume and velocity so low that they can’t help but move quickly?? (They won’t say but we’ll have statistics sooner or later.) So far this is good news for buyers and sellers; we really weren’t looking forward to major loan headaches.
Meanwhile, several real estate articles were reporting that Wells Fargo is also moving back into the subprime lending arena. The loosening of credit standards is what got so many borrowers into trouble in the last ten years, and almost brought the banking industry to collapse. But here we go again. And more evidence they are attempting to get lending volumes back up. And more propping-up of the housing industry and real estate values…
Some interesting sidebars to this; They are trying to avoid the term “subprime” because of the negative connotations, so one of the new terms is “another chance mortgage.” Another is that borrowers, under the new Dodd-Frank regulations, have to meet stricter criteria of income and debt, and if the borrower is proven to NOT meet those criteria and ultimately defaults on the loan, the borrower can sue the lender for making the loan in the first place. Bizarre. And certainly new opportunities for the legal field.
And during the period, RealtyTrac announced that foreclosure filings were up 57% in California in the month of January (from the previous year). That was after 17 consecutive months of declines. So what does that mean? Who really knows. Maybe they need to clean out some of the dead beats before the Counties start selling the properties for back taxes? Maybe the values are back to levels where they can reduce their loses to almost nothing? Or maybe they believe values have peaked? We’ll see if this trend continues.
The political environment has cooled down in Mammoth Lakes but an interesting trend is continuing. The Town is moving more government related activities to what are known as NGOs or non-governmental organizations. Basically, they are removing the decision making away from the local politicians. The Town has already done this with housing and transit. And now it is moving recreation in the same direction. This is a unique concept for California municipalities… Now if we could just give the airport to the Ski Area.
The reports are that the local snowpack is at 37% of normal. And we appear to be in better shape than most of the Sierra Nevada. Pray for snow!
My favorite saying the last couple of months is “Prices Are Going Up!” I say it with tongue in cheek. They are, and they aren’t. But I’m mimicking some of the other real estate people in Mammoth. The art of selling on “features and benefits” is long lost. Today, it seems the agents only want to sell hype and urgency, or play beat-the-price down. It is difficult to do that at the same time. But boy, they are trying.
The short sale of Seasons Four #190 at $150,000. This was one of those prolonged short sale negotiations (with the bank). This is a 1 bedroom + loft / 1 bath condo. This is a hot segment of the market and somebody left money on the table. This property could probably be flipped immediately for $200,000.
A 2 bedrooms / 2 baths at The Bridges closed for $405,000. Here is a ski-in and ski-out property where the value is down compared to sales of the past two years.
The home at 148 Canyon sold for $785,000. This 4 bedrooms / 3.5 baths home with 2-car garage sold for $356 per square foot. But this home is as close to the Village gondola as any home in Mammoth. And that is all the market will bear?? Or is all-of-a-sudden being that close to the Village not appealing? Buyers have certainly paid a premium for that proximity in the past. They did during the period at Val D’Isere and Mammoth Fireside.
A 2 bedrooms + loft / 2 baths at Sunshine Village closed for $230,000. These are popular units too. But with the a 1 + loft / 2 baths recently closing at $200,000, shouldn’t this be worth more? Some of these sales tell me prices are going down in some segments.
But then a Juniper Crest town home and an older luxury home on the Snowcreek golf course close in the mid-$500 per square foot range. These sales tell me prices are going up. And then there were just good wholesome condo sales in Snowcreek 4 and 5, Mountainback, and St. Moritz.
Other Real Estate News
I was wrapping-up some escrows during the period and got the usual requests for some missing documents in the other agent’s escrow files. Now, in the past 25 years I’ve reviewed as many escrow files as any broker in Mammoth. But what I’ve noticed over these years is that most real estate agents have simply become what I call “check-box Realtors.” The forms and disclosures have become so detailed and comprehensive.
The agents are now simply concerned with filling in the blanks and checking the boxes and having all of the forms completed so they get their commission checks (God forbid they get delayed). Many of them have never really even read the forms. Most have just become form automatons. The days of critically thinking about a transaction are becoming a bygone era.
Thanks for reading!
** Closed sales data is compiled from in-house files and public records.