Market Summary: March 17 – March 31
The Mammoth MLS is reporting 23 closings in Mammoth Lakes for the period ranging from a low of $90,000 to a high of $1,900,000. That is 10 more than the previous period. The sales data reports only two (2) REO/bank owned property closing and only one (1) short sale closing. The distressed (REO and short sale) sales have vanished, for now. The closed sales were evenly distributed throughout the whole price range.
At the period’s end there are 112 condominiums listed for sale, a decrease of one (1) from the previous newsletter. The inventory of single-family homes is down two (2) to 40 with three homes listed under $500K, and one of those has multiple offers and will sell at more than original asking price. Residential lots listed for sale are up one (1) to 37.
The total number of properties in “pending” (under contract) in Mammoth Lakes decreased by 3 to 84. Of the 84 properties in “pending,” 13 are “contingent short sales” and 32 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) decreased by 4 to 109. So an uptick in closings but not enough new properties “to contract” to keep pace. And no substantial change in inventory. A couple of high-end home sales at $1.3M and 1.9M, cash. And an unreported one at $2.2M. Those sales alone could be considered an excellent indicator for the market. But do they?
Market Updates and News
Mammoth is in the midst of spring break which historically brings a quality buyer pool into Mammoth. We’ll see what this year brings. So far there has been decent activity. This next week is suppose to have more occupancy and visitation than last week. Despite all of the warm weather the ski conditions remain good. Mammoth purportedly has the best ski conditions in North America… Basically a big, snowy December followed by a drought winter. In my 32 winters in Mammoth, none of them have been the same…
Still no definitive direction in the Mammoth real estate market that I can see. Some closed sales would indicate an uptrend and others would indicate a down trend. I was looking at statistical data on Zillow for Los Angeles County, city-by-city including year-over-year median price increases/decreases. I’ve never seen more confusing data. Neighboring cities (like Manhattan Beach and Hermosa Beach), one up and one down. Same with Palos Verdes addresses. Same with inland neighboring cities. I can show the same trends in Mammoth condo projects; some up and some down.
The condo hotel units are up (despite the lack of conventional financing). Neighboring projects in the Meadow have the older units up and the newer units down (?). Snowcreek by-and-large is stable. I can also show a handful of closings and new “pendings” of high-end homes that have been on-and-off the market in the past years and have been previously shunned. They are now selling. Some of these have been clearly overpriced in the past but also suffer from poor floor plans, over-building/marginal locations, or all three. So why are they selling now?
Mammoth real estate agents continue to receive “investor” inquiries. These aren’t the headline institutional investors purchasing real estate but more the mom-and-pop investor trying to find a return. Even worse is when these “investors” want to see “rental figures” on condos. It is their primary concern (sometimes even before they see the property). I basically hang up. Once again, Mammoth is not the place to chase yield.
Today’s Mammoth condo buyers DO KNOW they can rent their properties and recoup some of their expenses (I call it “covering their backside”). And they know they can accelerate that activity (including pro-active self renting) if necessary. I’m surprised so many local agents spin their wheels with these people. Meanwhile, there is an “investor” in town trying to buy up every cheapie property that comes to the market (including most REOs). I hope he has plenty of cash and a sound strategy, but if history repeats…
I was really hoping to post a lengthy blog on short sales (“Short Sale Burn Out”) this week but simply ran out of time (it’s half written). Look for it this next week. The distressed property market is changing once again. I had to eat my words of five years ago; “life is too short for short sales”… but now it may be coming true once again.
The sale of 91 Panorama Drive at $1,900,000 caught my attention not only for the price but how it relates to another property that is in escrow (and under construction). The 91 Panorama property is a large home that is 10 years old; lots of bedrooms and baths and 4300 square feet. It is located in the Snowcreek Crest area. It has incredible panoramic mountain views. Great home, the new owners should have years of amazing times there.
Interesting though is how it relates to the other home under construction (and “pending”). It too is on the same crest but a couple hundred yards to the west and close enough to make it an easy walk to Eagle Express (91 Panorama is in no way a walk-to-the-lift property). The new home is a little smaller but has all the utility. The construction will be better (newer) and the view probably even better. The walk-to-the-lift factor is quite valuable over the long run.
The home under construction went to contract last fall at some $300K less. The owner/builder is a long-time Mammoth real estate player. (The furniture in 91 Panorama wasn’t worth that much.) I’d take the one under construction (and for less money) all day long. Even better for a lower price. Interesting market dynamic.
A total of seven (7) of the sales were small condos under the $160,000 price point. As of right now there are only four (4) condos in the entire Mammoth inventory under $160,000 and one of those has multiple offers and a likely over-bid. Some of the closings during this last period represent what could be considered price increases, but for buyers looking in the low-end of the condo market, the selection is dismal. They’ll have to wait and see what the summer brings, or if the banks will move back into foreclosure mode anytime soon. Conversely, if a buyer moves up a $100K or so, there are “great buys.”
Three 2 bedroom / 2 bath closings of condo hotel units at Sunstone, White Mountain Lodge and Westin Monache at $400K, $415K and $445K respectively. All three with attractive locations and quality condition.
And a horrible house on John Muir for $369,500. Low-end home buyers are heading into desperation time.
Other Real Estate News
The rumors about Vail Associates purchasing Mammoth Mountain rose to their most heated level this past week including specific media coverage and fun public comments. Of course, there was complete denial from those who would really know so a betting man knows the odds are coming down. I’m looking forward to the day when my ski pass is good at all the resorts Vail owns…
But how would that affect real estate values?? In 1996, the Intrawest purchase was profound but took a good three years to move values. In 2005, the Starwood purchase (which has proven to quite un-profound) bumped the market 10-20% overnight. I’m thinking it might be time to buy a small motorhome so I can go visit all these other resorts. Vail’s grand plan is to turn many aging boomers into ski bums again. I’m giving the Vail acquisition a thumbs up, and it is inevitable.
Thanks for reading!
** Closed sales data is compiled from in-house files and public records.