Market Summary: May 12 – May 26
This newsletter will be somewhat abbreviated and slightly incomplete. By the time you receive this I will be headed into the tropical Pacific waters far off the coast of Baja in search large pelagics. And my next newsletter won’t be for another three weeks. Time for a little break before we head into “a very interesting summer.”
The Mammoth MLS is reporting 16 closings in Mammoth Lakes for the period ranging from a low of $162,000 to a high of $1,075,000. The sales data reports three (3) REO/bank owned property closings and no short sale closings.
Close to the period’s end there are approximately 110 condominiums listed for sale. That is LESS than the most recent previous newsletters. There was a small number of new condo listings prior to the Memorial Day w/e but there were even more going under contract.
Single Family Inventory
The inventory of single-family homes increased by a few with four (4) homes now listed under $500K (we’ll see how long they last).
Residential Lot Inventory
Residential lots listed for sale are now back up to almost 40 but that doesn’t reflect the recent market activity. There have been handful of quality sales and closings in the past month.
The total number of properties in “pending” (under contract) in Mammoth Lakes decreased by eight (8) to 63. Of the 63 properties in “pending,” 15 are “contingent short sales” and 24 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) decreased by four (4) to 5. By the time I left local agents were setting appointments with potential buyers and sellers for the Memorial Day w/e but the inventory is quite stale; no substantial seasonal increase as of yet.
Market Updates and News
The Ski Area will be open for the last gasp (days) and I don’t know if anybody cares. The golf courses are open and look lovely but they will need plenty of water soon. There is some lingering snowpack above 9,000 feet so most areas are accessible. The mountainbiking is good. Everything is greening up nicely.
Numerous owners and clients have remarked that they are being “bombarded” with postcards and mailings from Mammoth Realtors. The theme is “prices are going up, now is a great time to sell!” Ironically, many of these mailings are sent by agents who also present (recently) low-ball offers with lengthy price-per-square-foot justifications and other seller ignored rhetoric. But so far the lack of inventory has not sent buyers into the irrational zone of overbidding and overpaying.
Mammoth remains a discretionary purchase (and sell), or as I like to say “a don’t-have-to-buy, don’t-have-to-sell” marketplace. The forecast for the inventory and sales pace for the second half goes is anybody’s guess. The buyers and sellers will decide. And the extent of those mailings may be more a reflection of agent’s concerns over sales volume, or the lack thereof (and commissions), than anything else.
After having lengthy discussions with two VERY experienced Mammoth agents (about 60 years in the business combined and one of them I have a current transaction with) they both had the same identical comment, “it’s going to be an interesting summer.”. The dynamics are all in place; strong buyer interest, low inventory, sellers are being told “prices are going up so now is a great time to sell,” the remaining distressed properties (REO and short sales) are in a holding pattern (thank you California legislature), and with lower sales velocity, the agents with financial pressure will be pushing hard for sales.
At least the post office is making revenue… It will be an interesting 2nd half of 2013, and I’ll be here to report on it (and do some deals too).
Mammoth Mountain CEO Rusty Gregory surprised everyone (again) at a recent Town Council meeting by coming out in favor nightly rentals in the single-family zones. Until now he had been silent on the topic. In fact, he said he also had the support of Snowcreek developer Chuck Lande (Chadmar) and Jim Demetriades (Sierra Nevada Resort). Gregory thinks “it will be good for business.” But this is quite curious and many local observers are scratching their heads (what’s the ulterior motive?).
MMSA has significant interests (and revenue) in nightly rentals at the Mammoth Mountain Inn and running the front desks at the Village and Eagle Base (I’ve seen the real numbers in tax hearings and they are impressive). Demetriades has just dumped millions into the Sierra Nevada Resort (formerly the SN Inn). And now they are supporting the addition of more (quality) competition?? Hmmm…
But the real issue facing the Town is the lost TOT revenue (bed tax). I’ve worked with the last three County Assessors and I know how they feel about “escaped taxes.” They want every penny (it’s their job). The Town of Mammoth Lakes hasn’t motivated to that level of tenacity. But they may have to. Rusty Gregory admits that the house across the street from him (in the Bluffs) has transient tenants coming-and-going all the time.
Everybody knows the illegal rentals are going on all over town. But when will the Town figure out how to collect all the escaped bed tax?? (Or enforce the ordinance?) Owners utilizing online resources haven’t made the job easier. There is no doubt that with the “big 3” now outwardly supporting nightly rentals in single-family neighborhoods that this will go somewhere. Meanwhile, they just made a whole bunch of new enemies.
I can’t say enough for how exciting it is to see fiber optic lines being installed into the ground within the town limits. The Digital 395 project is coming to fruition. The “last leg” components are coming together. The commercial suppliers of Internet service are making their plans. It won’t happen instantly but the main components for superior Internet and wireless service are coming together quickly. The ramifications are far greater than just good bandwidth. They are far reaching. The new opportunities will eventually help smooth-out the ups-and-downs of the local resort economy.
The sale of 608 Monterey Pines Road for $420,000. Jeez Louise!, this is a sign of better market conditions. This is a vacant corner lot right close to Eagle Express that has been on the market for years. The seller was underwater but couldn’t do a short sale. The property had been in escrow before. This sale really benchmarks that the single-family market has stabilized. The buyer/contractor will build an efficient but really nice 2800 sqft 3-car garage “spec” home on it and the buyer will be stoked; walk to the chair, sunny, corner lot, beautiful mountain views, etc. And many wanna-bees will say “shoulda-woulda-coulda.”
The sale of 169 Lupin at $450,000 cash. This is a ~20 year old REO fourplex in the Sierra Valley Sites (aka “Ghetto” or “the Historcial District”). These are popular buildings for investors and for renters. This property had been neglected while it was heading through the foreclosure process. We estimated it needed about $50,000 in immediate repairs and attention. We also crunched numbers on it, over and over. This is so indicative of this modern era; invest a half-million $$ for a measly, and quite frankly, risky return. But the buyers were eager to do this deal. And there were many offers.
The REO sale of Snowcreek #23 at $280,000. This classic Phase I 2 bedroom + loft / 2 bath townhome certainly needed some work but this price won’t make the fellow homeowners happy. Similar units in decent condition BUT on the Creek setting with views have brought $150K to $200K more.
Two vacant lot sales in the Bluffs, including the “albatross lot” sold for $260,000. And two more good sales in The Lodges. Quality sells.
Other Real Estate News
Mammoth’s Town government is going through some serious transitional difficulties. But like I’ve said in the past, in the midst of all the negativity we have the opportunity to do what many believe we need to do with State and Federal governments too; downsize, rightsize, streamline, etc. But a recent Town Manager report states, “I mentioned that in addition to a financial crisis that we are barely avoiding, there is now a human crisis. The Town’s staff is simply burned out, overwhelmed by workload that is the same as it was before the significant staffing cuts, and demoralized as a result.”
I’m sure the local private sector feels really bad. But the state of the Town’s staff now resembles the state of how most businesses in Mammoth have always run; owners and employees burned out because of too much work, not enough staff, tight finances, and in various states of demoralization due to whatever (like the vagaries of winter or visitors who “left their brains in Mojave,” etc). I recall living through most of the 80’s and 90’s in this state of “human crisis.” So have most other Mammoth business people and employees. But we just went skiing (the “great equalizer” as we liked to call it), or went for a hike.
And today, this is not just in Mammoth, many business owners and employees are in similar states of “crisis” all over the country. Maybe the Town Council really is on to something.
I’ve cut staff, been overwhelmed with work, and a little burned out… But I’m going fishing!
Thanks for reading!
** Closed sales data is compiled from in-house files and public records.