Market Summary: June 17 – July 1
The nasty wind of the past week has ended and the weather has turned beautiful here in Mammoth as summer tourism cranks up. Today, the large and noisy Mammoth Motocross crowd moves out of town as the 4th of July crowd moves in. The Mammoth MLS is reporting 12 sales/closings in Mammoth Lakes for the period ranging from a low of $144,250 to a high of $1,600,000. The sales data reports 2 REO/bank owned property closings and 1 short sale closings, so “distressed” sales continue to make a decreasing amount of the total. Inventory numbers continue to remain flat, but demand isn’t. This is going to be an interesting summer!
At the period’s end there are 167 condominiums listed for sale, and increase of 1 (one) from the last newsletter. Inventory of single-family homes dropped to only 55, a decrease of 5. There are now only 40 residential lots listed for sale, a small decrease.
The total number of properties in “pending” (under contract) in Mammoth Lakes increased by 10 to 72, which again is interesting considering this should be a traditionally slower sales period. Of the 72 properties in “pending,” 36 (exactly half) are “contingent short sales” (which means they are pending short sale transactions). The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) increased again to 88. The bank owned property inventory has disappeared to a handful. The short sale inventory remains steady. Many observers believe the Mammoth real estate market is in a “normalizing” phase. But…
Market Updates and News
Mammoth mayhem abounds. D-day for the Town’s bankruptcy filing is this next week–right as Mammoth is celebrating one of its most popular holidays. There’s no reason to beat this dead horse. It will happen and we’ll have to see what the court decides. It will be wonderful to get all of this behind us.
Meanwhile, the Ski Area has decided to pull the plug on June Mountain. After losing money for the past 25 years you can’t blame them. The Ski Area is proposing a lengthy assessment period with the community and Forest Service to see if there is a viable plan for the future. But for now it is closed. Oddly, many of Intrawest’s remaining assets were recently placed on the market by a So. Cal. commercial broker.
Included in that list of newly marketed properties is the “Rodeo Grounds” property. This is the property at the base of June Mtn. that was at one time slated for development, most likely condos and commercial (village), that, in theory, would make the June Mtn. ski area economically vibrant. Much of the June Lake community opposed this development. Now the Rodeo Grounds is for sale asking only $2,900,000 for 86 acres. Seems cheap. Maybe someone can come in and buy the ski resort and the Rodeo Grounds and make something of it. But for now it looks like Mammoth Mountain has had enough. The boys back east see too much red ink. Or maybe it’s all part of the big land swap.
The listing and marketing of the remaining Intrawest properties is curious, especially right now. Fortress Investment Group bought Intrawest several years ago and the Intrawest founders (and real drivers) fled shortly thereafter. Fortress has struggled under heavy debt load. Some will remember them almost having Whistler (the ski area) foreclosed on during the Winter Olympics. Regardless, it makes sense for them to be liquidating these random properties. But why all of a sudden, and right now? Hmmmm…
Based on what I see in the files, there continues to be a flow of money from stock portfolios to cash real estate purchases in Mammoth. Even with ridiculously low interest rates buyers continue to use proceeds from the sale of stocks. On June 12 the AP reported that “investors were withdrawing billions of dollars from stock funds.” Some of it is landing here in Mammoth. We’ve seen this before, but this time it is mostly early boomers. It is interesting to think that many affluent people currently have more confidence in Mammoth Lakes than in Wall St.
Okay, a buyer paid $1,600,000 cash for a residential lot in Juniper Ridge that is right on the ski run. The neighbor is the big yellow house that everybody snidely remarks about as you ride up Eagle Express. Almost new luxury homes with outstanding features are selling at this price point. Ski-in ski-out condos are depressed and not showing any significant added value… the Mammoth market never ceases to amaze.
There has been good sales activity in Creekhouse (Snowcreek Phase VII) as of late with a unit just closing at $769,000. This is one of the nicest locations in all of Mammoth. Hopefully, this sales activity will motivate Chadmar to build a few units next summer. Even during the leanest years of the early-and-mid 90’s, Tom Dempsey was building units in Snowcreek; there was always momentum and signs of progress.
The sale of a 3 bedroom / 3 bath in Phase V of Snowcreek for $521,500. These are popular end-units with a 1-car garage and lots of light. This is the smaller floor plan but a nice property. More price support in Snowcreek V.
The sale of a Snowcreek Phase I 2 + loft / 2 bath unit for $300,000. This was not a REO or short sale, just a motivated seller with equity. That throws the comparable sales (of similar units) in Snowcreek phases I and II into a wide range; almost a $200K difference just based on location, view and condition.
Another sale in Snowcreek Crest, this one for $1,462,500. I was reflecting on the Mammoth real estate markets of the 80’s and 90’s when the economy and market was bad. I don’t recall the consistent volume of high-end sales in the residential market. It really is a significant indicator in the market.
Since I started this newsletter a year ago there has been at least one high-end sale like this every two weeks. Granted these homes are selling below replacement value and some are sold fully furnished too. But it is telling. There is a confidence level in this market that wasn’t here in the doldrums of the 80’s and 90’s. A couple of mediocre homes in the $400K range closed, one a REO. Buyers in the low-end of the single family residential market are pressed to find good deals.
As a side bar, the Bishop real estate market is an interesting one too. It definitely pops in the late spring and summer. There is currently solid price support in the $300K for nice residential properties in good neighborhoods.
Other Real Estate News
The Town’s impending bankruptcy certainly doesn’t help the local economy especially after the poor winter season of 2012. Many of the Town’s “creditors” are local residents. Many of Mammoth’s best construction people have work but not as much as they would like, or need. Some have sought work out-of-town and some are simply working very little. Some businesses have closed and more will. Simply, the velocity of money continues to slow down. And there won’t be any new significant real estate supply for years to come.
One of my little research projects is to ask my fellow real estate agents and brokers what they think about the bankruptcy and how it will affect the market. I get a variety of responses. It would appear that some agents are using it as a listing tool; painting a picture of doom and gloom with negative long term effects. Sell now! One long-time agent told me “rich people just want to come here and ski and dine out, that don’t care about what the Town is doing.” Another told me that he had “a bunch of buyers” just sitting on the fence because of the uncertainty. One just gave me a blank stare (you do read the local newspaper?) Must be nice to live with your head in the sand. I asked one that I know recently went through bankruptcy himself and he responded “We’ll survive.”
Happy 4th of July week!!
Thanks for reading!
** Closed sales data is compiled from in-house files and public records.