Q: We had been in Mammoth through the holiday period so we investigated some condos on the market. We came away with all the impression that Mammoth real estate is a superb value at the moment. We think time of drought suppressed values. What is your opinion?
A: Mammoth condos are always a good value as soon as the ski conditions are fantastic. With snow comes enthusiasm. Alumni from the Intrawest sales teams will surely keep in mind phrase “Selling is definitely the transfer of enthusiasm.” So snow equals enthusiasm equals the selling of real estate property. But is Mammoth real estate property an excellent value with or without snow?
We can easily talk all about proposed developments, and who should own the Ski Area, increased air service and fancier ice rinks all we wish. But quality snowpack to perform and recreate on is definitely the crème de la crème supporting the price of local real-estate. Especially since progressively more home owners are attempting to maximize nightly rental income along with the winter visitors are the “money” in the equation. In this respect the last four drought winters have negatively impacted values.
Value is certainly subjective and susceptible to multiple factors. Let’s examine other important dynamics affecting Mammoth’s real-estate “value.”
The recent drought period has coincided with all the peak and eventual decline of the distressed property market. Foreclosures and short sales impacted the real estate values here in Mammoth around any place in the world. Foreclosures peaked within the 2011-12 timeframe and short sales peaked shortly thereafter (and how the government intervened in all of that is another column). The ideal “deals” (lowest prices) were to be found because period. So the foot of this past market cycle really occurred along with the beginning of the drought.
There is also a large faction of mammoth real estate who purchased or refinanced inside the mid-2000s who definitely have been trying to liquidate but can’t afford the losing of their good credit standing. For these people a foreclosure or short sale has gone out-of-the-question. It will be the nature of the market. Many have watched real estate property values nudge upward in past times few years and are determining to sell. Most of these sellers actually have to set money into the purchase to close the escrow. Some are taking substantial loses (plus some are offsetting those loses with gains in their other investment areas).
However the winding down from the distressed property cycle combined with the drought winters created an equilibrium available in the market. We have seen enough supply and enough demand to hold selling prices within a stable range. We have seen no gigantic push upward like countless other markets in California. And as usual in Mammoth, there are numerous segments from the market which may have moved differently.
One of several market comparisons I like to make is the thing that a home sold for within the mid-2000s peak market era compared to a recent sale. I only want to use very same properties for your comparisons because there might be numerous minute but critical variables. When closed sales come throughout the MLS I check to see when the property sold back into the 2004-2007 timeframe. I try to see if you can find any significant improvements that have been performed to the property that will modify the calculation.
Many of the sales that fall into this comparison study demonstrate that the Mammoth industry is selling at 60 to 70 percent of your selling prices from 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 10 years ago). The best recent sale which i recall was 53%. On the very lowest of the market some were below 40% with their mid-2000 selling price (most were foreclosure/REO properties). In the opposite side there are many Mammoth properties which can be selling slightly over 70% of the they sold for inside the peak period. Nevertheless the majority will be in the 60 to 70% range.
You could surmise using this that the values simply have rebounded modestly. And maybe the drought winters had plenty to do with it.
The drought winters also delayed some of the Ski Area’s plans for development and expansion. The current ownership seems destined to spend money for capital improvements with money they realize as profits as opposed to utilize money they may borrow. So these improvements have already been postponed through the drought winters. These Ski Area improvement projects always tend to create some real-estate buzz (enthusiasm) plus some increased demand. Investors always follow investors and investment.
The one thing that strikes me as odd would be that the Ski Area’s ownership owns an important portion of the remaining developable property in Mammoth and yet they see no reason at all to take a little risk to stimulate your local values. But what do I am aware? Sometimes it seems that the environmentalists do run the show within Mammoth. The older I recieve the better I think that could be which 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 all their property. We’ll must see.
One other way of assessing regardless of if the local real-estate is actually a “good value” is looking at what exactly is being newly built; almost nothing. If values were overinflated there can be construction taking place everywhere. Today, clients who need a nice condo to acquire have to think about a unit which was internal the 2000s or have a look at a thing that needs significant remodeling. Including the ones integrated the 2000s need some updating and many of the older ones are deserving of “to the studs” remodels. But in any case the greatest price-per-square foot will be near to the simple price of today’s new and quality construction. And therefore doesn’t include the land or permits. Many people believe that properties selling “below replacement value” mean “good value.”
The only real product that is now being newly built in the present market are some homes in Sierra Star. They are single-family homes from the $900,000 to $1,500,000 range. This really is a quite strong segment of the Mammoth market and that cool product is assisting to meet the demand. In the 79 single-family home sales in 2015, 30 were priced in excess of $1million. Many buyers are seeing the “good value” within the new homes. Just look at all the factors. The lots can be found on among the most gorgeous fairways in the Sierra Star golf course. These parcels were previously slated for condominiums. But that market doesn’t exist. And so the land is likely being acquired at a price that helps make your whole equation work.
The equation also includes an experienced developer and builder with forty years of experience in Mammoth. The project is probably being run as efficiently and effectively as you possibly can while creating a very attractive finished home and neighborhood. The bonus for some owners is always that the zoning allows nightly rentals. And also the rental/revenue potential is apparently extremely high. The entire package is extremely attractive, particularly when the discriminating new owners arrive at select all the finishing touches.
Another “good value” factor is 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 get the associations running more professionally than in the past. This runs from accounting and reserve requirements to regular meetings and communications. For associations where the majority of owners are second homeowners, this is certainly much more important. And 64dexmpky drought has played a part too; local HOAs have saved on snow removal expenses in past times few years and they have also been made to reconsidered their water and labor intensive landscaping.
And if a buyer looks to create their very own home within Mammoth, the vacant land market still offers excellent and relatively affordable opportunities. Mammoth remains land-locked so sprawl is out of the question. As well as the hard costs of subdividing land remain high. So for all those looking in this particular direction, this excellent value may well be a “great value.”
Ultimately the “good value” criteria is as different as the variety of buyers and owners of Mammoth property. The task is making the proper match, and this isn’t always easy. But that is the job of any good agent or broker. And yes, some properties are clearly better values than the others. And that is certainly true through the whole price spectrum. And is particularly never about price.
So circling back to the question, yes Mammoth remains an effective value. The greater it snows the more effective the value. So allow it to snow, allow it snow, allow it to snow!