Lingering Fall Colors And Snow On The Mountain Tops!!
Market Summary: October 9 – October 23
The Mammoth MLS is reporting 29 real estate closings in Mammoth Lakes for the period ranging from a low of $135,000 to a high of $1,330,000. And handful of the closings were actually in the last few days of the previous period. The closings were again very typical of the Mammoth market in the past 18 months; 13 condo closings with sale prices under $300,000, 27 of the 29 closings were condos, and one Grey Bear home closed at $1,330,000. Of the 29 closings, 25 were financeable properties and 16 were conventionally financed. This period last year there were 23 closings. The year before 18.
At the period’s end the condominium inventory is down another 11 to 129. There were only six (6) new condos brought to the market during the period and they are all new to the market. There are now only three (3) condos listed for sale under $200,000. I think you would have to go back to the mid-2000s to find that condition in the marketplace. There are only 14 condos listed under $250,000. The biggest concentrations of listings are in Aspen Creek and The Lodges. There are only six (6) Westin units on the market. Last year at this time there were 146 condos on the market. Two years ago there were only 120.
Single Family Inventory
The inventory of single-family homes is down seven (7) to 61. The best availability remains in the $700,000 range. Some of the best in that range have recently sold. Most of the rest are compromised in some way. This time last year there were 56 on the market, 55 two years ago.
The total number of properties in “pending” (under contract) in Mammoth Lakes is down again by four (4) to 57 at period’s end. Of the 57 properties in “pending,” there is one (1) “contingent short sale” property and 44 are in “back-up” status. The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) is down four (4) for the period at 82. These numbers are more or equal to the past two years. The strong spring and summer sales following a decent winter should have equated to a stronger fall.
Market Updates and News
In weeks past I have blamed the election for the decline in Mammoth real estate sales. This is normally the time of year we see increased “pre-winter” sales. Maybe I’m crazy. But in the past few days a broad variety of corporate CEOs and CFOs have been making the same correlation. From Dunkin’ Donuts to Bank of America to Pulte Homes to Morgan Stanley to bedmaker Select Comfort. They have all reported slowed business “blamed” on the current election fiasco. It will be good to get beyond this.
This past weekend was about as perfect as a fall weekend can get; warm days, cool nights, wispy clouds on a deep blue canvas, some remaining fall colors and a dusting of white on the mountain tops. Last weekend the “atmospheric river” that hit northern California made a significant presence in Mammoth with strong winds and rain. Mammoth Mountain received a decent shot of snow. So I had to go look for myself. Dave’s Run looks skiable. There was no snow up there two weeks ago. The runs on the Main Lodge side of the mountain have snow in them but are not skiable. That is good enough for now. The ground will freeze and any new snow will have something cold to stick to. There are showers in the forecast for the next week. Mammoth Mountain has historically wringed inches and sometimes feet of snow out of little fronts like this. We’ll be hoping.
The Town Council reconvened this past week and is already in hot water for taking “leadership” positions on the “move forward” position. They approved a ~$150,000 contract for a planning facilitator for the Downtown revitalization plan. The consulting work is to include working with property and business owners for input. And also utilize extensive online tools to gain input from the public. The majority of the Council is looking for an action plan, an implementable plan that can be kicked into motion immediately. And they have emphasized that this is not a re-development plan. The is about a hundred small and large steps that can begin immediately, and they don’t want unnecessary delays.
The problem; the Council ramrodded this through without any RFP (Request For Proposal) process. The RFP process takes a little extra time. It is typically the way government works. It opens the door to competition amongst those that can provide the needed consulting work. That competition is not only what they will charge, but what they will perform. If it is a contractor replacing sidewalks the work performance expectation is standardized and any contractor is expected to perform to that standard. There isn’t much room for variation.
But planning (and other nebulous) consulting work can vary greatly. The desired outcome is often described by a few paragraphs of “goals” or Scope of Work. For these types of contracts the RFP process makes the bidders compete on how and what they will perform. Sometimes the same people just muddle through and sometimes they do outstanding work. And sometimes creative solutions are discovered just out of the RFP process itself.
But even worse for the Council is The Sheet immediately accused the Council of cronyism. Apparently there is a historic nexus between the new consultant and Town Manager Dan Holler going back to 2000 or earlier. If the heat and outcry become too much the Council may have to move to the RFP process. Or maybe now that the cards are on the table the consultant will be compelled to do an overtime job. We’ll see. Regardless, this type of process should be beneficial. I believe property owners and business owners could start making minor but effective changes by as early as next summer.
The Mammoth Lakes Airport was also in the news this past week on two fronts. The first should significantly change (for the better) the number of canceled flights in and out of the airport. The airport administration has worked to change the visibility requirements at the airport for the Alaska Airlines flights. I had a long discussion about this last March with airport manager Brian Picken when I was renewing my TSA security clearance. He was pretty excited about this prospect and now it has come to fruition.
Apparently these commercial pilots were bound by some overly strict rules regarding visibility at the airport. Often these weather conditions would force the pilots to turn around while in the air or simply cancel the flights before taking off. According to Picken the Alaska pilots considered the visibility requirements to be excessive and well beyond what was necessary to maintain adequate safety. Their Bombardier aircraft are designed to fly in these types of conditions. The changes are expected to begin Nov. 11.
Also at the airport this winter we expect to see JetSuiteX flights from Burbank and maybe even from John Wayne in Orange County. The “X” side of JetSuite is the public side as opposed to their private charter operation. MMSA will be subsidizing these flights. But the real kicker is that the flights are 30 passengers or less on the Embraer aircraft that was originally designed to carry 50 passengers. There will be no baggage fees and “unlimited baggage” for the passengers. That’s great for skiers and snowboarders.
Even more attractive is that these flights will not fall under TSA requirements and will flow through the general aviation side of the airport (Hot Creek Aviation) and not the commercial side. Flights are expected to run $300-500 for round trip. According to JetSuiteX’s website the Embraer aircraft can fly up to 515 miles per hour. That could be a quick trip from Burbank or Orange County.
And last week Vail Resorts announced that they had finalized the acquisition of Whistler Blackcomb. Apparently all of the pre-sold passes at various ski areas became a bit cumbersome so the regular Vail Epic pass holders will receive five days of Whistler access in the upcoming season. The Whistler pass holders will receive five days at any of the other Vail resorts with some black out dates. All of the pass holders will have unlimited Epic Pass access in the following season of 2017-18. The Epic pass now also includes 17 days of skiing at a variety of resorts in Europe including Val d’Isere and Arlberg. Vail also stated that there will not be a price increase for next season. The $849 price for Whistler alone is a bargain.
With 13 of the 29 sales during the period being condos selling below $300,000, the low end of the condo market is obviously seeing substantial activity. The 1970’s built 1 bedroom condos are consistently selling in the $160-170,000 range. The larger 2 bedroom + loft units are consistently selling in the upper $200,000 and over range.
Two of the 2 bedroom / 2 bathroom floorplan units at Solstice closed for $339,000 and $345,000. These are units that sold brand new in 2006 in the $680,000 range. That was the peak of the market (and Intrawest sales hype). They have only recovered to ~50% of those peak values. These are nice properties. They do represent good values in the Mammoth market. The HOA fees are high but include heating and hot water. That can be good value for heavy users.
A top floor 2 bedroom / 2 bathroom unit at the Westin Monache closed for $700,000. It looks to the east and overlooks the Village with views down to the airport and Crowley Lake. A top floor 1 bedroom overlooking the entry closed for $325,000. It was on the market for 595 days.
Grey Bear II #17 closed for $1,330,000. I’m sure glad I recommended to my clients they change the floorplan to a 3-car garage rather than the original 2-car garage. It will be a little extra money well spent. If nothing else they can put a ping pong table in one of the bays for the grandkids to go play on some snowy nights.
Other Real Estate News
Airbnb is back in the news this weekend. New York Governor Andrew Coumo signed legislation on Friday that will impose major fines on those that advertise nightly rentals on sites like Airbnb. Some of the news outlets missed the “multiple units” part of the advertising fines. Basically, New York is trying to end the business operators who are renting apartments and condos and simply converting them into nightly rentals. The fines aren’t directed at those that are renting out rooms in their own homes. It is estimated that these “multiple unit” operators represent about 5% of New York’s Airbnb business.
The politicians have received pressure from both the hotel industry and the affordable housing groups. These are strange bedfellows. But Airbnb already cooperated with New York by saying they would ban multiple unit operators and also collect state taxes.
Airbnb has immediately turned right around and sued New York over the matter. And legal scholars have already lined-up and believe Airbnb has a solid case. Between Federal laws on Internet advertising, the First Amendment, and other restraint of trade issues, the new law may not stand up to legal challenge.
And this next week a new study is expected to be released, titled 440 Million Reasons to Tax Airbnb Vacation Rentals. The study estimates that bed tax revenue for Airbnb rentals in the Unites States will be in the neighborhood of $440 million in 2016. Of that, $117 million will actually be collected by states that have tax arrangements with Airbnb. But there is $260 million in taxes that won’t be collected. If those nightly stays were in regular motels and hotels the taxes would be collected. This study should wake up the states that don’t have taxing arrangements.
Ultimately, Airbnb continues to disrupt the vacation and nightly rental business. And the level of disruption will evolve. Here in Mammoth, the large volume of condominiums available for nightly rental should keep operators from converting long-term housing units into nightly rental units. And hopefully the Town will remain vigilant on collecting all the available bed tax.
Thanks for reading!
** Closed sales data is compiled from in-house files and public records.