Market Summary: May 22 – June 19
This report is for the past four weeks. The Mammoth MLS is reporting 25 real estate closings in Mammoth Lakes for the four week period ranging from a low of $156,000 to a high of $3,175,000. Of the 25 closings, 24 were financeable properties and 16 were conventionally financed and one seller financed. Eight of the 25 sales were condos selling under $200,000 and 14 were condos selling under $300,000. The high sale of the period was a 20-unit apartment complex on Main St.
At the period’s end the condominium inventory is down six (6) to 154. There were 24 new condo listings for the period. This time last year there were 192 condos on the market. So we start the summer selling season with relatively low condo inventory.
Single Family Inventory
The inventory of single-family homes is up six (6) to 58. This time last year there were 66 homes on the market. With some new listings coming to the market there are now 12 homes listed for sale under $600,000.
The total number of properties in “pending” (under contract) in Mammoth Lakes is up 10 to 49 at period’s end. Of the 49 properties in “pending,” there are two (2) “contingent short sale” properties and 30 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is up 13 for the period to 80. Last year there were 43 properties under contract in Mammoth proper and 80 in the aggregate. The stats would indicate the real estate market is stronger than last year. Snow will do that.
Market Updates and News
The wet and cooler weather has just finally abated in Mammoth Lakes. The weather gurus are pointing out the wild swings in weather this past spring; mostly cooler and wet weather with an episode of intense heat. There was an overnight rainstorm last week that produced over two inches of rain.
Summer Kicks Off As the Weather Finally Warms and the Crowds Arrive…
I can personally attest that the ocean temperatures from San Diego and a thousand miles south are much cooler than last year. Almost astonishingly so. El Nino is long gone. The Mammoth region is currently as green as it has been in several years. Let’s hope it all equates to a moderate fire season and plenty of snow next winter.
But a summer-type crowd moved into Mammoth this weekend and the initial phase of the Mammoth Motocross crowd moved in too. The “old-timers” raced this weekend and the pros will race in the coming week. With very high temperatures slated for southern California this next week, a “beat the heat” crowd should be arriving too. Mammoth looks ready for another big summer.
The Town Council election weirdness continues. Due to the modified ballots and a hitch in the absentee ballots the vote was truly compromised. I simply never got the chance to vote. My original and then modified absentee ballots never arrived before I left on vacation. By the time I returned the counting was closed. Mammoth has a high percentage of absentee voters especially during the spring vacation period. I guess we’ll never know if the outcome would have been any different.
Mammoth’s two new Councilmembers will be long-time local resident Bill Sauser and Cleland Hoff. Sauser has lived in Mammoth basically all of his life and has been involved in a variety of volunteer positions. He has been a long standing member of the Parks and Recreation Commission. Hoff was a local TV reporter for many years and she has a private marketing and media business. Both should be well versed in “where we have been” but I will have concern over their ability to digest the finances. I’m guessing neither will stand strongly against any political pressure exerted by the Ski Area administration.
The Town and the new Village parking lot owner have obviously come to some agreement. The parking lot was re-opened this weekend. That solves an immediate headache. The summer events in the Village are popular.
The Town Council gave final approval last week to the construction of the new police station (Mammoth will finally have a jail). The project will be located on the “McFlex” property at the entry to town across from McDonalds. This was a Forest Service exchange property from last decade that was intended to benefit the Town, County and hospital. The new County courthouse is already there. This will be convenient to have the police station right next door to the courthouse.
While Mammoth Lakes isn’t exactly a high-crime area, the police have operated out of a grossly substandard facility for decades. This is long overdue.
But the planning and ultimate finance process has been telling about the Town’s staff and their ability to asses this type of project. This is especially disconcerting because they are currently assessing similar capital improvement projects; the ice rink/MUF, a permanent events venue, parking lots, Airport facilities and more. The Town started this process stating that the maximum budget for the entire project would be $2 million. The final approved budget is nearly $3.1 million and you can bet there will be cost overruns. After all, it is the police station and “public safety” is the primary reason to justify any expense in this era.
The additional funds will come the Capital Reserve Fund and the Town’s “Reserve for Economic Uncertainty.” The true economic uncertainty is now the Town’s public works staff for estimating construction costs. Many local residents have been questioning this and now we have the evidence. The original public bidding requests estimated the hard construction cost at ~$2.2 million. The low bid came in at $2.75 million. Any overruns will come from the Uncertain Reserve.
All of this should impact the dollars available for the permanent events venue, the ice rink/MUF and the Airport terminal improvements. (And the very latest is Whitmore Pool needs several hundred thousand dollars in repairs and it is on leased land (LADWP) too!!… And we know which one is most important to the Ski Area. The events venue is top priority for the average business man in Mammoth. Two of the five Councilmembers have strong Parks and Recreation backgrounds and are strong advocates for the ice rink facility.
Meanwhile the cost estimates keep climbing for the ice rink project. The EIR scoping period doesn’t officially close until July 1 so we don’t even know what the grand scale of the environmental review will be. The conservative construction estimates are now at $2.5 million. Utilizing the margin of error on the police station project the real cost estimate could be closer to $3.5 million or more. No wonder the Parks and Rec director has been recently quoted as needing to “find the money.” In about 10 months there is bound to be public outcry for the Town spending the $300,000 for the EIR. And a serious threat of litigation by the surrounding HOAs could be the final straw.
And late last month the Town received notice from the U.S. District Court that the 2003 injunction related to the environmental documentation for Mammoth Airport will be dissolved. This is a major milestone. This opens the door to plan (including new environmental studies) the new three-gate terminal at the Airport that is envisioned behind the existing terminal. The FAA has committed approximately 90% or more of the necessary funds to build the terminal.
The lack of true “gates” and terminal are a problem with Mammoth’s weather conditions. The tentative plan is moving the entire terminal facility to the north (away from the runway) and being able to service up to three aircraft at one time. The ultimate plan also includes removing some of the older hangars and constructing large hangars on the property once slated for the residential/hotel property (that the Town received back after the litigation). These could service commercial and other high-end aircraft. The lifting of the injunction should now open the door for these improvements.
My Real Estate Q & A that appeared in the Memorial Day Weekend issue of The Sheet was in response to another trend of government overreach here in Mammoth against private property owners. The fire chief has already apologized (at least to me), “failure of my commitment to stewardship in public service.” He wants to meet but I’ve been gone and have been catching up on business. Hopefully we can keep the local bureaucrats from getting out-of-line.
With 14 of the 25 sales in the past four weeks being condos selling under $300,000, there really isn’t much to say about that. Except for the “crashpad” effect is alive and well in Mammoth.
Another vacant lot sold, this time it is an interior lot in The Bluffs, closed at $379,000.
Another new and large Gray Bear home closed for $1,575,000.
The previously mentioned 20 unit apartment building on Main St. closed for $3,175,000. The seller bought this in the 2000’s peak of the market and made substantial improvements. I had an an institutional buyer looking at the property who “wouldn’t go over $2.8M” based on the financials. The apartment segment of the Mammoth real estate market is the only one approaching the “bubble” territory of the mid-2000’s.
Other Real Estate News
A recent Letter to the Editor expanded on themes of a column I wrote a year ago. The letter was written by long-time Mammoth Councilman Kirk Stapp who remains very active with the Town’s housing authority, aka Mammoth Lakes Housing. Stapp was responding to a proposal by the new owner of the Shady Rest parcel. The Parcel has been zoned “affordable housing” now for a couple of decades. The Parcel has also changed ownership several times since then. The new owner wants to set aside some of that zoning presumably for some real profit.
One of the interesting points Stapp brings out is the different way Vail Resorts and Mammoth CEO Rusty Gregory view deed restricted affordable housing and employee housing. It reiterates the dichotomy I keep expressing. Vail Resorts believes they “should be an integral partner in expanding the employee housing capacity.” They currently have $30 million committed to such housing in their resorts.
Mr. Gregory on the other hand believes the housing requirements are the major obstacle for developers here in Mammoth. He has said the requirements make Mammoth “laughingstock” in the eyes of developers. (My column spoke to overall demand and implied that the private equity form of ownership is the major turn-off to developers.)
But the Town has reduced the original housing requirements over and over again to accommodate development. Ultimately, the real difference in view is that of a privately equity fund (Starwood Capital) trying to grind every last nickel out of an enterprise and that of a sound publicly traded corporation (Vail Resorts) trying to build a long-term successful operation. The difference is stark. In our modern age of conspiracy theories one could almost believe the Starwood ownership era is a Sierra Club conspiracy.
And it was Gregory himself who toured me through the employee housing at Whistler in 1991 impressing upon me the critical need for such housing in developing resorts. Obviously times have changed.
Thanks for reading!
** Closed sales data is compiled from in-house files and public records.