Summer-like Weather Finally Sets In, Raging Snowmelt!!
Market Summary: May 14 – May 28
The Mammoth Lakes MLS is reporting 18 real estate closings in Mammoth Lakes for the period ranging from a low of $195,000 to a high of $1,410,000. Of the 18 closings 17 were financeable properties and 12 were conventionally financed. Ten of the 18 sales were condos listed under $375,000. The same selling pattern continues.
At the period’s end the condominium inventory is down another four (4) to 73. This would normally be the time of year to see the condo inventory building. There were 17 new condos brought to the market during the period and nine (9) are already in escrow. The buyers are clearly pouncing on the new listings of decent quality. The least expensive condo listed for sale in Mammoth Lakes is $209,000. There are only six (6) condos listed under $325,000.
Single Family Inventory
The inventory of single-family homes is up one (1) to 37. There are a total of four(4) homes listed under $647,000. One of the new listings is one that has been brought to the market every summer for the past four or five years after having winter tenants. The market keeps rejecting it. Odds are it will sell this summer.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down four (4) to 70 at period’s end. Of the 70 properties in “pending,” there are 56 in “Active Under Contract” status (formerly “back-up”). The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is at 105.
Market Updates and News
This is a somewhat abbreviated report because I’ll be on the ocean the next two weeks. And as to be expected, my business pipeline filled just prior to a vacation….Warmer weather finally hit Mammoth last week. Thank God. The shorts and bikes are coming out. The week before many local residents woke up to a couple of inches of new snow on their cars several mornings in a row. In the middle of May and after the winter we have had, that can be demoralizing.
However, the warm weather is bringing daily flood and caution warnings when going near bodies of water. The water is moving fast through the streams and creeks. So much so that the local fishing is purportedly “not so good” because the water is moving too fast. This is bound to last for a couple of months. The last measurement has 92 inches of water in the Mammoth Pass. Hopefully everybody heeds the warnings. It can be dangerous. There has already been one death related to fast running water in the Owens Valley.
The Mammoth real estate market remains active especially the condo market. This is typically the slowest time of year in Mammoth for real estate. The fall is typically slower for tourism but the pre-winter buyers are activated. Tourism picked up as Memorial Day weekend came closer and of course the internationally renown Mule Days in Bishop is this weekend. And of course there is plenty of skiing to do.
The most apparent aspect of the Mammoth real estate market that has occurred in the past 30 days is that buyer’s offers now have to be strong. Low-ball offers, and even some pretty decent offers, are simply being ignored. Many sellers are not even countering. Some aren’t even interested in formally rejecting the offer. And if the inventory remains low as we head into the summer, this condition in the marketplace may become more profound. But there continues to be a trickle of sellers who have decided that it is a good time to sell. And buyers have to be reminded that most of Mammoth is still selling at 60 to 70% of the peak values of the mid-2000’s.
There hasn’t been anything of real substance in the local press about the acquisition/merger of Mammoth Resorts. So (as usual) I’ve been doing my own research. Check out my most recent Broker’s Report on the KSL/Aspen/Intrawest merger with Mammoth. The same content appeared in this weekend’s edition of The Sheet as a Q&A.
The National Association of Realtors recently released the 2017 Investment and Vacation Home Buyers Survey. Vacation home purchases plunged 21.6% for the survey period. But “investment” sales in the second-home market increased significantly. Right now it is all about generating nightly rental income. There was no mention of VRBO and Airbnb, but my readers know this ground has been covered.
Rented.com recently released their 2017 Short-Term Rental Income Report. The information is based on Airbnb data. I perused the section that peels out the “Best Performing” and the “Worst Performing” locations based on return on investment (ROI). There were upscale mountain resort communities in both section (Mammoth wasn’t listed in either). Maui was listed in the worst section. So was Big Bear. Three Florida beach communities were in the top five best locations. I couldn’t really find a great correlation. I still think it comes down to the owner and the manner in which they set the property up in regards to decor, comfort, effectiveness and efficiency.
Meanwhile, Armstrong Economics reports that sales volume and home values have crashed in London after the Conservative Party voted in a special tax on homes that were being use as rentals and second homes or “non-domiciled residences” (love some of the British terms). There was an apparent boom of purchasing prior to the enacting of the new tax. And now it has reversed dramatically.
The warning is the affect on property values when taxes go up. With Governor Brown and the California Legislature out to raise any and all taxes, it is only a matter of time before Prop. 13 comes back as a target. Hopefully they know the devastating effects it would have. But I certainly don’t give them credit to understand what would happen.
The site at the much-hyped new construction/units at Creekhouse (Snowcreek Phase 7) finally saw some action; an outhouse and a pallet of plywood showed up. Not much else. Considering they already have a foundation ready to start framing on they aren’t moving too fast. There is no use in wasting good weather for construction and getting buildings “buttoned-up” before winter. The summer and warm weather may not last, the big winters usually come in pairs….That would be nice.
And for what it is worth, a new short sale came to the market this past period. I thought we were done with that.
A pretty blasé bunch of closings during the period. A top floor 1-bedroom at Juniper Springs Lodge closed for $260,000. That is a recent high for that floorplan in that project. But the original pricing.
More low-end condo sales and another premier residential lot in the Snowcreek Crest subdivision closed for $575,000.
Two units closed at the Courchevel project. It has been a hot seller as of late.
Not a sale but a new listing of note. Actually it is a sale that has been previously noted in this newsletter. The listing of a house in the Slopes. This property has been on-and-off the market for a couple of decades. My company had it listed way back when. It has sold multiple times. The owners never last. It is a very unique property with many “groovy” upgrades. It is an emotional purchase. Any agent who has any history with it will (should) stay away from it.
The problem is that some of the remodeling and upgrades don’t stand up to winter very well. So here it is back on the market. It closed escrow only last summer. The agent who sold it then is relatively new to the market, and has no history with the property. The last time it sold was in 2012. It had been on the market for over a year after the big winters of 2010 and 2011. That is telling. We’ll see how long it takes to sell again…..
New Favorite Listing For The Period!!
Other Real Estate News
More and more sellers and buyers mention that they have gone to Zillow to get the “Zestimate” for their property or the property they are interested in. The Zestimate values can be all over the board. Sometimes the disparity can be a point of contention, sometimes it can bring skepticism. It is one of the new challenges of the real estate agent in the field.
And increasingly the real estate industry is coaching its members how to handle these scenarios. The first line of response is “Has Zillow been in your house?” That could be good or bad. Basically, Zillow is using public information like Assessor’s tax information data including square footage, age, etc. and marrying it to the County Recorder’s deed recordings and pushing the information through the various algorithms and coming up with a value. Sometimes the end-value is pretty darn close. And sometimes not.
What Zillow doesn’t do is look at all of the variables that can make a property special or a complete junker. And certainly not the minute nuances of the property. Even appraisers can have hard time with this. If you don’t spend time out showing potential buyers properties, then you can be really out-of-touch with where their mindset is. Improvements, or the lack thereof, can be very subjective too.
In Mammoth, there are buyers who want to purchase very “turn-key” properties because they don’t have the time to remodel and/or decorate. Many don’t care what the view looks at. Others only want a property with a special view or setting and don’t care about what the property looks like, they intend to make it theirs and are willing to put the effort in. Both sets of buyers are willing to pay extra for what they want. How does Zillow calculate that? And more recently (as I keep discussing) buyers are looking for condos to put into self-renting type programs. There are attributes that make some properties better than others. Does Zillow have an algorithm for that?
And sometimes the raw data is wrong or not completely telling. For years this was a disaster in Mono County. It is better today. But as an example of just relying on sales data, I was recently working on figuring out the value of a property that had sold in 2000 and 1987. I questioned whether the sales data was correct as reported in the tax data. So I went back to my old MLS books (literally from the pre-computerized MLS and “lost” MLS data days) and verified the sales prices.
They were correct but there was another data point that was very telling and Zillow would never know. In 1987 the property had been on the market for 337 days before it sold. In 2000 had been on the market for 785 days before it sold. The days-on-market (DOM), the market conditions at the time, and the sales prices give me a far better understanding of where it should be valued today.
Other “coached” responses; “Is Zillow going to make an offer on your property?” and “It isn’t what Zillow thinks it is what the buyers think.” Ultimately the Zestimate is a good starting point. And educated buyers and sellers are a good thing. I often look at Zillow to see if I’m missing something. Realtors now have a similar tool known as RPR, or Realtors Property Resourse. I find it to be a little more accurate. It is pulling data from additional resources.
But sometimes you just need some good marketing and negotiating, and old fashioned “price discovery.”
** Closed sales data is compiled from in-house files and public records.