Market Summary: September 8 – September 22
The Mammoth MLS is reporting 19 closings in Mammoth Lakes for the period ranging from a low of $172,000 to a high of $1,975,000. That is two (2) fewer closings than last period but still up from the period before that. But let’s scrub that data a little more. Four of the closings were Altis II lots that had been “reserved” in the past 12 months and finally had the paperwork necessary to close. And two of the closings are small commercial lots adjacent to the Village that have been on the market forever.
Absent those six closings, eight of the remaining 13 sales were under the $325,000 mark… Somewhat lackluster activity for this time of year. Once again, there were NO REO/bank owned property closings and only one (1) short sale closing for the period. What a difference a year makes.
At the period’s end there are 111 condominiums listed for sale in Mammoth Lakes, that is down another six (6) from the last period. But there have been new condo listings, but others have expired or gone-to-contract. The lack of quality inventory could certainly be the driver for lower sales volume. There appears to be plenty of interested buyers, but fewer interested in just “settling” for something. The more they look, the more educated they become. And the more discerning they become. Good condos DO come to the market but they don’t typically last very long. Meanwhile, local contractors report that there is a “rush” to get condo remodel projects (large and small) completed before the holidays.
Single Family Inventory
The inventory of single-family homes increased by three (3) to 50. But it is re-list (and re-hash). The current inventory is really stale. The buyers don’t want it (at least not at this price) and the sellers don’t appear truly motivated. Another month and some of these will turn to seasonal rentals (again). The market is desperate for some fresh inventory.
Residential Lot Inventory
Residential lot sales appear to have gone on hiatus again. That push is over.
The total number of properties in “pending” (under contract) in Mammoth Lakes is even at 72 for the period. It was down 4 (four) from the previous period. Based on historical trends, this pending number should be rising this time of year. This is Mammoth’s “selling season.” Of the 72 properties in “pending,” five (5) are “contingent short sales” and 31 are in “back-up” status. Once again, the short sales are becoming fewer and fewer, just like REO sales.
The total number of pendings in the aggregate Mammoth MLS (which includes outlying areas) decreased by two to 91… The market has clearly slowed. The lack of quality inventory is partly to blame. Prudent buyers are also reluctant to buy into the “prices are rising” mantra. And Mammoth remains a discretionary purchase for most. Patience is a virtue… and sometimes a necessity.
Market Updates and News
The Mammoth real estate community sat through a presentation by Mammoth tourism boss John Urdi this last week and it was quite enlightening. They sure generate a volume of data, but it is a data driven world. Mammoth’s $18 million municipal budget is 70% bed tax (TOT). The new TBID should generate another $4-5M that will all go to tourism marketing. Bed tax and occupancy numbers are up significantly in the shoulder seasons. Urdi appears to be the first ML tourism director to effectively generate increased numbers in the elusive “shoulder season.” Even on this dead, crummy weather late-September weekend there is a special fly fishing event in town–and there are tourists in Mammoth.
I have known some of the past tourism directors (the last 30 years) fairly well and they have all had their own success, but Urdi appears to be one of the most successful yet. The numbers are all up. He is now merging the Town’s tourism department with the ML Chamber of Commerce (an organization that has always muddled through). This should work for mutual benefit. What strikes me about Urdi; he is a true “mountain” guy, he comes from the ski resort industry and background.
The past tourism directors were professional marketing people who ended up in Mammoth. Urdi has lived in mountain resorts his whole life and ended up in community marketing and tourism promotion. Now if he can effectively chase down the “escaped” TOT, Mammoth is well on its way to financial stability… And the early data shows that the dense smoke from both the Aspen fire (early August) and the Rim fire (early Sept.) did negatively impact Mammoth’s tourism numbers.
When I read about real estate markets outside of Mammoth, the driver of many markets are “institutional” investors; these are REITS, hedge funds, etc. that have purchased large quantities of properties purely for investment (think single-family rentals). These institutional cash buyers are tough for the average homeowner to negotiate against. And they have clearly driven prices up in many markets (although they appear to be backing-off in many markets). But that has not happened in Mammoth. Outside of a few individuals who have made multiple purchases of cheap condos, lots and income properties, this type of buying has not occurred. There really isn’t the scale for them. And maybe this is why Mammoth’s values haven’t screamed upward like so many of these markets.
High-speed Internet service in Mammoth is here. I had to try it myself. Suddenlink was ready to install it within short notice. And it is for real. I’m hoping for faster upload speeds at some point, but the download speed is as advertised. This is just the start of many good things to come emanating from Digital 395.
The mortgage industry is about to go through BIG change. But it seems nobody knows exactly how. Just in the last week I am receiving the following information; the Dodd-Frank driven regulations are going to make mortgage qualifying more stringent, and the new rules go into effect Jan. 10. We’ll hear the name Consumer Financial Protection Bureau more often… On the same date, Fannie Mae loan limits are suppose to drop, but nobody knows by how much, …Meanwhile, Bloomberg reports that Chase will be easing mortgage standards in the hardest hit housing markets…
And one mortgage lender sends me loan rates and qualifying for borrowers who have had foreclosures and bankruptcies in the last six months, and greatly reduced FHA qualifying wait periods (like six months) after foreclosures, short sales, etc. if the borrower can prove a 20% or greater loss in household income prior to the event… and an increasing number of “private money” lenders offering loans for all “un-conventional” financing (which includes just about anything assuming you have enough down and want to pay the interest)… Seems half the industry remembers the mid-2000s and the other half doesn’t.
The closing of the aforementioned Altis II lots. These new single-family lots are located above The Bridges condominiums adjacent to the premium Greyhawk subdivision. This is a Starwood project. Since the Altis condo project was so poorly received (maybe just bad timing), Starwood decided to just develop some high-end lots (nine total) and monetize this asset. Some of the lots are right on the ski run and have views. The slopeside lots have now closed in the $1.2-1.4M range. The non-slopeside lots are half that or less. Unfortunately, now we have, in a premium location, more hodge-podge development that Mammoth is so famous for… in the middle of multi-million dollar custom homes will be four (two duplexes) condos.
A basic Westin Monache Studio with no special attributes closed for $189,000. Prices are up over the past year in that project. Rental revenue streams remain good, but the increases may be more hype than ROI.
Not much other excitement; a buyer paid LOTS for an over-improved 2/2 condo with incurable defects… a VERY TIRED gambrel in the Slopes closed for $415,000, but it had a one-car garage… a quality high-end home in a beautiful setting sold for almost $2M… and Snowcreek and Chateau Road remain good addresses…
Other Real Estate News
A recent article (“Emerging Trends in Real Estate 2013) in a real estate trade publication is extolling the virtues of a hot segment of commercial real estate; strip malls. That should just warm Mammoth’s heart. For decades Mammoth has been highly criticized for being “a series of strip malls.” Apparently now they are the hot thing, again. They are the new “value proposition” for local communities and neighborhoods. The key anchor tenant these days is centered on food, namely popular fast food chains.
But today’s dynamic “mix” includes services that will make the strip mall a “destination.” Add in the retail stores that sell those items you just can’t wait a couple of days for the UPS man to deliver… hmmmm, doesn’t really sound like anything has really changed… And while the Village is very appealing to many, as long as Mammoth remains predominantly a drive-to resort, the strip malls will certainly have their place.
Meanwhile, in speaking with the new (once again) owners of the Sierra Center mall (think Shogun), they are carrying-out plans to re-energize the facility. There are some new tenants, but apparently there is a new, impressive fountain coming for the large atrium. Suppose to be completed by the holidays, can’t wait. Mammoth needs that facility vibrant again.
Thanks for reading!
** Closed sales data is compiled from in-house files and public records.