Mammoth Lakes Real Estate

Have Real Estate Prices Hit Bottom?
 

Real estate in Mammoth Lakes has been impacted the same as Southern California real estate with fewer units selling then prior years and prices starting to slip into lower brackets. You, the real estate buyer, are wrestling with the classic conundrum of wanting to buy at the bottom of the market, but not knowing when that bottom will hit.

 

We have provided “answers at a glance” regarding Mammoth real estate with stats and facts and a projected “bottom” of the market. Please remember that these are possibilities only in an almost infinite array of futures.

 

The data sets below are for sales of condos, homes and land in the greater Mammoth Lakes market as reported through the Mammoth Lakes Multiple Listing Service, MLS, for the annual period ending on October 15^th of each year.

 

Condos

Active 10/15/07	HIGH	LOW	AVERAGE	MEDIAN	TOTAL PRICE	LISTING COUNT	DOM	List to Sell Discount
LIST PRICE:	$2,495,000	$219,000	$647,013	$548,950	$181,810,733	281	142	3.9
Sold 06/07	HIGH	LOW	AVERAGE	MEDIAN	TOTAL PRICE	LISTING COUNT	DOM	List to Sell Discount
LIST PRICE:	$2,375,000	$195,000	$664,891	$574,900	$157,579,299	237	200	36.8
SOLD PRICE:	$2,375,000	$219,900	$649,625	$545,000	$153,961,349
Sold 05/06	HIGH	LOW	AVERAGE	MEDIAN	TOTAL PRICE	LISTING COUNT	DOM	List to Sell Discount
LIST PRICE:	$1,995,000	$210,000	$648,348	$549,000	$304,075,626	469	109	1.8
SOLD PRICE:	$1,995,000	$207,000	$639,486	$540,000	$299,919,193
Sold 04/05	HIGH	LOW	AVERAGE	MEDIAN	TOTAL PRICE	LISTING COUNT	DOM	List to Sell Discount
LIST PRICE:	$2,250,000	$59,000	$589,254	$525,000	$354,142,242	601	157	3.1
SOLD PRICE:	$2,175,000	$55,000	$580,089	$514,900	$348,633,688

 

Condos are the majority of the properties sold in Mammoth, with sales of condos typically selling 4 to1 over homes. We show the total number of condo units selling year after year DECLINING by over 50% compared to last year. The current listing count exceeds the total number of sold units for all of last year which would indicate a stock pile of over one years inventory of condos for sale. Past years have seen this inventory as low as just four to six months. This phenomenon can easily be seen by looking at the increasing number of “for sale” signs that can be seen throughout Mammoth.  Thus, we have a “buyers market” with plenty of quality inventory available.

 

 

Homes

Active 10/15/07	HIGH	LOW	AVERAGE	MEDIAN	TOTAL PRICE	LISTING COUNT	DOM	List to Sell Discount
LIST PRICE:	$5,900,000	$463,900	$1,862,711	$1,295,000	$173,232,197	93	177	5.2
Sold 06/07	HIGH	LOW	AVERAGE	MEDIAN	TOTAL PRICE	LISTING COUNT	DOM	List to Sell Discount
LIST PRICE:	$2,500,850	$299,000	$1,121,503	$939,000	$54,953,650	49	143	24.6
SOLD PRICE:	$2,500,850	$285,000	$1,068,695	$900,000	$52,366,088
Sold 05/06	HIGH	LOW	AVERAGE	MEDIAN	TOTAL PRICE	LISTING COUNT	DOM	List to Sell Discount
LIST PRICE:	$3,300,000	$450,000	$1,107,301	$869,900	$93,013,349	84	163	15.0
SOLD PRICE:	$3,100,000	$450,000	$1,076,119	$864,500	$90,394,050
Sold 04/05	HIGH	LOW	AVERAGE	MEDIAN	TOTAL PRICE	LISTING COUNT	DOM	List to Sell Discount
LIST PRICE:	$4,950,000	$79,900	$1,089,370	$799,000	$120,920,149	111	127	6.8
SOLD PRICE:	$4,950,000	$79,900	$1,046,639	$780,000	$116,177,025

 

Home sales “units sold” has slipped in a similar fashion as condos with “units sold” DECLINING with available inventory approaching two years.  In the higher, over $2,000,000 priced homes, the available inventory is approaching a 10 year level.  So we have a buyers market in homes as well.

 

Land

Active 10/15/07	HIGH	LOW	AVERAGE	MEDIAN	TOTAL PRICE	LISTING COUNT	DOM	List to Sell Discount
LIST PRICE:	$2,499,000	$259,000	$811,748	$580,000	$50,328,399	62	318	5.9
Sold 06/07	HIGH	LOW	AVERAGE	MEDIAN	TOTAL PRICE	LISTING COUNT	DOM	List to Sell Discount
LIST PRICE:	$2,350,000	$275,000	$889,854	$710,000	$19,576,800	22	219	21.4
SOLD PRICE:	$2,050,000	$270,000	$778,204	$630,000	$17,120,500
Sold 05/06	HIGH	LOW	AVERAGE	MEDIAN	TOTAL PRICE	LISTING COUNT	DOM	List to Sell Discount
LIST PRICE:	$4,400,000	$299,000	$902,490	$615,000	$39,709,600	44	283	5.8
SOLD PRICE:	$4,400,000	$300,000	$861,266	$594,500	$37,895,710
Sold 04/05	HIGH	LOW	AVERAGE	MEDIAN	TOTAL PRICE	LISTING COUNT	DOM	List to Sell Discount
LIST PRICE:	$2,450,000	$275,000	$664,194	$510,000	$43,172,649	65	168	2.3
SOLD PRICE:	$2,000,000	$275,000	$623,661	$510,000	$40,538,000

 

Land sales have DECLINED by over 50% compared to last year, with inventory of land “for sale” approaching a three year level. 

 

The facts above indicate fewer properties, condos, homes and land are being sold year-after-rear and inventories are rising. You might ask, “Are the prices of “sold units” going up or down?”

 

Sold prices have been FLAT for condos and homes. The sold price for condos and homes has not changed year-after-year significantly. Land sales show DECREASES in sold price which may be the leading indicator of “sold price” for condos and homes in the 07/08 period. 

 

The “list to sell discount” reflects the initial price that sellers wanted for their property compared to the actual SOLD price. This percentage will show how well seller’s expectations meet buyer’s willingness to pay for the properties. We see consistent results in the 06/07 period for condos, homes and land where seller’s kept lowering their prices until buyer’s anticipation of values were met. Despite the over zealous expectations of seller’s initial pricing for their properties in 06/07, buyer’s were willing to pay prices approximating last year’s levels, hence no significant price change for sold properties year-after-year. Asking prices have been corrected where the current “list prices” are now mirroring the “list to sell discounts” of past years.

 

Realtors® have done their job extremely well by successfully communicating to seller’s the need to price properties approximating 05/06 price levels. However, will this adjustment hold for the 07/08 selling period?  I suspect NOT!

 

Buyers have an expectation that prices will continue to go down, even though the actual results show that this has not been the case.  The phenomenon of waiting for the bottom that has not yet come is creating a new bottom. Buyers are NOT buying, but are just waiting. So what will change the cycle? 

 

Many factors are in play to switch the cycle to the sellers side. We have market dynamics in Mammoth that are not controlled by the local market.  Southern California, as a whole, will need to see improvements in its real estate market before Mammoth can improve.  Major developers like Starwood, Cypress Equities and Mammoth Crossing must start construction of hundreds of new units to create buyer interest and demand in Mammoth. We need sizzle and lots of snow to shift the mood of fence sitters to become buyers.

 

When that shift in mood happens, our fence sitters will find a plentiful inventory that is priced right.  If you plan on buying in Mammoth, now is the time.  Hunting the bottom of the market is too elusive and can be counter productive. If you want to find a unit that is perfect for your family’s wants and needs, buy now.  Plan on purchasing for the long term and Mammoth will reward you with priceless memories and profits too!

 

David H. Schwartz

Broker ~ President

Mammoth Realty Center

 

Information is reliable but not guaranteed.  All inquires and comments are welcome by contacting Broker Dave at the Mammoth Realty Center using David@MammothAnswers.com . All articles are blogged www.MammothRealtyCenter.com .

 

What do you call a Realtor® that has not sold anything for the past six months, “hey waiter” is my bet! Mammoth has over 200 realtors and about 10 sales a month. Someone is not eating; in fact Realtors® are starving. The number of sold properties is so low that even the most optimistic are feeling blue. It may not be until 2009 before we see any life in the Mammoth real estate market. My calculations show that, this year, alone, at least $15,000,000 in commissions has NOT flowed to the real estate community due to the down turn in sales. That’s $15,000,000 that is not going into the community for dinners out, home improvements, local media advertising, charitable contributions and the multitude of other spending Realtors® and their families traditionally do.

Coincidently, our retailer store-owners are feeling the crunch too. Look at our retail malls that have so many empty spaces. Merchants have packed up and left. Most limped out of town after being bludgeoned by land lords for higher rents and increased assessments for deferred maintenance on their aging buildings. Many were good friends that have been in Mammoth for years. Not any more!

Most years Mammoth would see one or two foreclosures annually. We have dozens that are about to happen. Many are owners that have loans that allowed them to buy their condo with little or no cash down. Rents sucked last season so the “investments” are upside down. If you have no market to unload the property, then mail the keys to the bank. Let the bank unload the property. At least you stop the pain of thousands of dollars flowing out monthly on a property that will not appreciate fast enough to ever catch up. Your credit will be destroyed but what are you going to do?

The equity in your property at home, somewhere in southern California, used to be the gift that kept on giving. You could just do a refinance and pull out the equity, just like a bank account. Not any more. The “pass GO and collect $200 bucks” game is over. Now you just watch the bills roll in and play the rob Peter to pay Paul game. Oh well it was fun while it lasted.

So is the party over my friend? For some…YES; for many it has not even begun. One of my favorite sayings about real estate, that I invented, is “if you can pay you can play’. Southern Californian’s are rich. You may not be, but trust me, there are so many well-todo, money-flowing, successful folks out there it would make your head shake and ask, “why not me”. They are bullet proof and could not care about the current real estate market in Mammoth. In fact, they have been feasting as the stock market has risen to record heights. Many are seeing average gains in their portfolios in excess of 15% per year. (The gains are really higher but I did not want you to feel too bad about your personal poverty). These folks will be Mammoth’s salvation.

Rich buyers will be in the market soon enough snapping up great deals that will be seen as bargains in just a few years time. The rich do get richer! If you can afford to buy now then make the trip to Mammoth and hunt down that great buy because we may be at the bottom of the low pricing model.

Mammoth has good news that is just around the corner. We have a major developer/ owner, Roger Staubach with Cypress Equities who purchased the Hillside project located next to the new Westin Monache (it is scheduled to open by December 07). It is rumored to be a Ritz Carlton or perhaps a Montage five star resort property. Roger Staubach has a fantastic attitude about development of a project that fits my suggested mantra for builder/ developers that enter the Mammoth market;” build it and they will come…later”. They will not be waiting to see the results of a presales event before they commit to fund and build the project. What a breath of fresh air for Mammoth. They have faith in themselves, their product AND Mammoth. Way to go Roger! I hope other billionaire builder/ developers are paying attention to the new guys in town because they may learn a few new tricks or at least pick up the vibrations of what the correct attitude feels like for a healthy future in Mammoth.

Mammoth’s real estate values will flow at the same level and pace that is experienced in Southern California. We are expecting a soft landing that may not happen during this 08 ski season but should be in place by next season. I do suggest that you buy now if you find the perfect property that works for you and your family because pricing may be at or near the bottom. My new mantra is “Mammoth…For Life”. See you in the market.

David H. Schwartz President ~ Broker Mammoth Realty Center

All questions and comments are welcome using David@MammothAnswers.com. Information is reliable but not guaranteed. The future value of real estate is not guaranteed.

Every year I like to review the numbers to see if my perception of what is happening with Mammoth real estate matches reality. Realtors® and consumers, just like you, are asking me for a recap of the market.

I have used data from the Mammoth Lakes multiple listings service comparing a year ending April 30, 2006 to the same period (one year) ending April 30, 2007.  The data sets are for “units sold”, “sold volume”, “average price sold”, “DOM (days on marker)” and “list to sell”.  We have complied data for “All” sales categories that include, land, homes, condos, fractionals, commercial and multi-family (apartments).  Our analysis highlights, land, homes and condos. 

The raw data is presented in list format and graphically for the rest of us. We have a few surprises that I look forward to detailing for you. The raw data follows:

We have roughly 40% fewer sold transactions this year over all. Land shows the largest decline in closed transactions with a 66% drop.  Homes down 51% and condos right behind them with a 45% decrease in units sold. 

The total volume of dollars (sold transactions) tracks closely the decline in units sold with land showing the largest decline with $37,000,000 lower volume.  In addition, homes and condos volume declined by $54,000,000 and $118,000,000 respectively.

Average sold price was predictable and surprising too.  Land took a hit with average sold pricing down 18+%.  Surprisingly, the homes and condos went UP in average price.  In fact, the homes average price increased by 5.45% or $55,000 and condos trended up $3.1% for an average dollar increase of $19,000 per condo.

What is logical is the fact that land sold faster, (by 70 day), this year than last.  Land had fewer units sold and for less money on average than last year. Cherry picking is the most probable explanation; the best land sold fast and for great prices.  Now may be the time to buy land. Homes and condos sold in about the same amount of time this year as they did last year. It feels like it is taking longer to sell homes and condos because of the reduced volume but statistically it is not.

The percentage list to sell is one of my favorite topics.  This is the yard stick Realtors® use in writing offers.  How low do you start the negotiation?  Less 10%? Less 5%?  Usually, no one expects to pay the asking price.  Land got slammed with selling prices falling 15% under the asking price.  This is greater then a 145% decrease over the prior year. Land sellers could not get the buyers to go any higher so they buckled and said…OK; take it for that low price.  Homes and condos tracked very close to prior year list to selling price. I have seen buyers in the market writing offers 10% under asking price and they are not winning those offers.  Sellers are not ready to take the drastic discounts we have seen in the land segment of the market.

My prediction for the future, which no one knows for sure, is as follows. Land will continue in its slump due in part to the horrific cost of new construction.  It will be so expensive to build on that land that the game will shift to the very rich and famous buyers of which we have very few.

Homes will be selling well due to the problem facing land above. Homes will be relative bargains compared to buying land and building.  You will be able to purchase a home for less then it would cost you to start from scratch this is classic economics in its purest essence. 

Condos will sell well but for a different reason. Developers have many new projects ready to start in Mammoth, One Hotel (across from the Village), Eagle Run Village (Ritz-Carlton?) and Sierra Star golf course (Four Seasons?) on the way. They are faced with the builder’s nightmare of escalating costs that has become almost unpredictable.  For this reason they will most likely have to offer fractional product (more then one owner per unit) to keep price-points within reach of the Mammoth resort buying masses. 

This will start the trend I will call “Whole Ownership Bonus”. If the new product is all fractionals then the old product, most of the existing condos, will become highly desirable because of the relative value established by the fractional multiplier.  A one quarter fractional owner (four owners per unit) will each pay on average of $450,000 for a total cost per unit of $1,800,000.  You could buy a whole ownership condo for $650,000 (today’s average sold price), making it a bargain relative to the fractional product. This is where the “whole ownership bonus” kicks in.

Fortunately the fractionals coming on-line will be branded product that will have superior locations and outstanding amenities that may be worth the fractional-ownership trade-off. 

Time will tell if I am correct.  Mammoth has a fantastic selection of beautiful opportunities that are priced right.  If you are waiting for the prices to come down before you purchase your home or condo think again.  Statistically that is not what has happened.  Prices went UP over the past year and for that matter have gone up over the past five years. Happy vacation/resort house hunting, see you in the market.

David H. Schwartz
President ~ Broker
Mammoth Realty Center

Information is reliable but not guaranteed. The future of real estate can not be predicted and this is just one possible outcome of many.  We welcome all comments and questions directed to David@MammothAnswers.com .  Raw data has been blogged at http://www.mammothrealtycenter.com/