Q: We had been in Mammoth during the holiday period and we looked at some condos available for sale. We came away with the impression that Mammoth real estate is an excellent value at the moment. We believe the years of drought suppressed values. What is your opinion?
A: Mammoth condos are often a good value as soon as the ski conditions are excellent. With snow comes enthusiasm. Alumni of the Intrawest sales teams will certainly keep in mind phrase “Selling will be the transfer of enthusiasm.” So snow equals enthusiasm equals the selling of real estate property. But is Mammoth real-estate a great value with or without snow?
We can easily talk exactly about proposed developments, and who should own the Ski Area, increased air service and fancier ice rinks all you want. But quality snowpack to perform and recreate on may be the crème de la crème supporting the value of local real-estate. Especially since an increasing number of homeowners are trying to maximize nightly rental income and the winter readers are the “money” within the equation. In that respect days gone by four drought winters have negatively impacted values.
Value is certainly subjective and at the mercy of multiple factors. Let’s take a look at other important dynamics affecting Mammoth’s property “value.”
The current drought period has also coincided using the peak and eventual decline of your distressed property market. Foreclosures and short sales impacted the real estate values within Mammoth around around the world. Foreclosures peaked within the 2011-12 timeframe and short sales peaked shortly thereafter (and how the government intervened in all of that can be another column). The very best “deals” (lowest prices) were to be found for the reason that period. So the base of this past market cycle really occurred in addition to the beginning of the drought.
There is also a large faction of mammoth homes for sale who purchased or refinanced from the mid-2000s who definitely have been looking to liquidate but can’t afford losing their good credit standing. For them a foreclosure or short sale has gone out-of-the-question. This is basically the nature with this market. Many have watched real-estate values nudge upward before several years and are opting to sell. Most of these sellers have to put money in to the purchase to seal the escrow. Some take substantial loses (plus some are offsetting those loses with gains inside their other investment areas).
Although the winding down of the distressed property cycle together with the drought winters created an equilibrium in the marketplace. There has been enough supply and enough demand to help keep selling prices in the stable range. We have seen no gigantic push upward like a lot of other markets in California. So when usual in Mammoth, there are several segments of your market that have moved differently.
One of several market comparisons I like to make is the thing that a house sold for inside the mid-2000s peak market era compared to a recent sale. I only like to use exact same properties for that comparisons because there may be countless minute but critical variables. When closed sales come through the MLS I determine if the property sold back into the 2004-2007 timeframe. I try to find out if you can find any significant improvements which have been done to your property that will affect the calculation.
Many of the sales that belong to this comparison study show the Mammoth industry is selling at 60 to 70 percent in the selling prices in the mid-2000s. And again there are many variables. The Intrawest developed and sold properties from that era usually have lower percentages (meaning they typically sold for higher market prices ten years ago). The cheapest recent sale that I recall was 53%. With the very lowest of your market some were below 40% with their mid-2000 selling price (most were foreclosure/REO properties). On the opposite side there are several Mammoth properties that happen to be selling slightly over 70% of the they sold for inside the peak period. Although the majority are in the 60 to 70% range.
One could surmise from this how the values just have rebounded modestly. And maybe the drought winters had plenty concerning it.
The drought winters also delayed several of the Ski Area’s plans for development and expansion. The present ownership seems going to spend some money for capital improvements with money they realize as profits instead of utilize money they could borrow. So these improvements have been postponed with the drought winters. These Ski Area improvement projects always usually create some property buzz (enthusiasm) and a few increased demand. Investors always follow investors and investment.
The thing that strikes me as odd is the Ski Area’s ownership owns an important portion of the remaining developable real estate property in Mammoth but they see no reason for taking just a little risk to stimulate the regional values. But precisely what do I know? Sometimes it appears that the environmentalists really do run the show within Mammoth. The older I get the greater number of I think which may be that is a good thing.
And lately it appears to be the the Ski Area’s owners have realized the “good value” of experiencing the Town’s ice rink aligned with their real-estate. We’ll have to see.
A different way of assessing regardless of if the local real estate is a “good value” is looking at what is being newly built; almost nothing. If values were overinflated there would be construction going on everywhere. Today, buyers who require a nice condo to get have to consider a unit which had been built in the 2000s or have a look at something which needs significant remodeling. Even ones internal the 2000s require some updating and many of the older ones are deserving of “to the studs” remodels. But in any case the best price-per-square foot will be near the simple price of today’s new and quality construction. And therefore doesn’t range from the land or permits. Some people assume that properties selling “below replacement value” mean “good value.”
Really the only merchandise that is now being newly built in the current market are a few homes in Sierra Star. These are single-family homes in the $900,000 to $1,500,000 range. This can be a very strong segment of your Mammoth market and this cool product is assisting to fulfill the demand. Of your 79 single-family home sales in 2015, 30 were priced in excess of $1million. Many buyers are seeing the “good value” from the new homes. Just examine all of the factors. The lots are placed on many of the most gorgeous fairways in the Sierra Star golf course. These parcels were previously slated for condominiums. But that market doesn’t exist. So the land is likely being acquired at a cost that can help create the whole equation work.
The equation also may include a highly skilled developer and builder with 4 decades of expertise in Mammoth. The project might be being run as efficiently and effectively as possible while making a very attractive finished home and neighborhood. The bonus for several owners is the fact that the zoning allows nightly rentals. And the rental/revenue potential is apparently very high. The complete package is quite attractive, particularly when the discriminating new owners arrive at select each of the finishing touches.
Another “good value” factor is definitely the healthier state from the local condominium associations. Many buyers, owners and sellers might not exactly recognize this. The California Civil Code (aka “Davis-Stirling”) requirements on HOAs have the associations running more professionally than ever before. This runs from accounting and reserve requirements to regular meetings and communications. For associations where nearly all owners are second homeowners, this is certainly much more important. And 64dexmpky drought has played a role too; local HOAs have saved on snow removal expenses previously few years and they have also been forced to reconsidered their water and labor intensive landscaping.
And when a buyer looks to build their very own home here in Mammoth, the vacant land market still offers excellent and relatively affordable opportunities. Mammoth remains land-locked so sprawl is unthinkable. As well as the hard costs of subdividing land remain high. So for those looking in this particular direction, this good value may well be a “great value.”
Ultimately the “good value” criteria is just as different as the variety of buyers and people who own Mammoth real estate. The process is making the best match, and therefore isn’t easy. But this is the job of any good agent or broker. And yes, some properties are clearly better values as opposed to others. And that is true throughout the whole price spectrum. Which is never exactly about price.
So circling returning to the question, yes Mammoth remains a great value. The greater it snows the greater the significance. So let it snow, allow it to snow, let it snow!