For the buyer who needs to finance a purchase, the loan process has become very tedious, stringent and frustrating. Not only does the buyer have to be “gold plated” to qualify for a loan, but the complex itself must have “project approval” by the lender before getting started on the process.  Without “project approval” the buyer is risking money spent on an appraisal, home inspection, etc.   In the event the lender finds that there are too many nightly rentals or full time tenants, they will ultimately reject the loan.  This happens frequently with out of area lenders.

One of the first questions I ask prospective buyers is whether they need to finance, which helps me narrow down available condos that have “project approval”.  So far, only Wells Fargo Home Mortgage in Mammoth is the only lender who can successfully lend on condos that have “project approval”.  For a conventional 30-year fixed loan on a second home, they will require 25% down payment.  Applicants also need to have very strong credit scores (over 750 FICO) and show the proper debt to income ratios in order to qualify. It is customary to provide a loan prequalification letter along with an offer, which gives the buyer more credibility in the negotiating and offer process, however, the purchase contract states that the buyer has up to seven (7) days to provide a loan prequalification letter from the date mutual acceptance.  In a few cases, I’ve seen buyers wait until after acceptance to apply for a loan only to find out that they can’t qualify or the condo they’re under contract to purchase doesn’t have “project approval”.  In today’s tricky lending environment, buyers definitely don’t want to “put the cart before the horse”, which only leads to wasted time and effort (not to mention disappointment).

As of March 2013, Wells Fargo Home Mortgage in Mammoth cannot lend on the following condo developments:  All Village Properties (Lincoln House, White Mountain Lodge, Grand Sierra Lodge), The Westin Monache Resort, Juniper Springs Lodge, The Summit (litigation by the HOA against contractor), Sunshine Village, 1849, St. Anton, Viewpoint, Sierra Park Villas, Mammoth Green (litigation by the HOA against the developer), Snowcreek II (litigation by the HOA against contractor), Solstice (litigation by the HOA against the developer), Eagle Run (litigation by the HOA against the developer), Meridian Court (litigation by the HOA against the developer), and Mammoth Creek.

For questions or more information, feel free to call or e-mail.

Posted March 23, 2013 by:

Verena Robinson, Broker Associate
DRE License #01512209
RE/MAX of Mammoth
toll-free (877) 924-8521
verena@mammothlakesresortrealty.com

Conditions are incredible and most of your early season obstacles in the upper mountain are well-covered, opening up terrain for every ability level.  The early snowfall, unlike last year’s, will guarantee a nice experience for skiers and riders coming for the holidays and into the New Year.  Air service is now in full swing with flights from Los Angeles, Orange County, San Diego and the Bay Area.

These great snow conditions have gotten buyers excited about owning a little piece of heaven in Mammoth.  Our real estate market continues to be competitive with a below-average level of inventory that’s struggling to keep up with the demand.  Properties that come on the market competitively priced end up with multiple offers, and generate bidding wars.  However, the challenging financing landscape remains to be an obstacle to a possible increase in property values.  Stringent lending requirements are giving the cash buyer with a clear advantage over a buyer needing financing.   Like never before, CASH IS KING when buying in Mammoth.

Posted December 11, 2012 by:

Verena Robinson, Broker Associate
DRE License #01512209
RE/MAX of Mammoth
toll-free (877) 924-8521
verena@mammothlakesresortrealty.com

TOML agreed to a settlement in the amount of $2 Million per year over the next 23 years, which would include all fees and interest owed on the original sum.  Clearly, cuts will need to be made to the Town’s budget in order to accommodate this payment plan, which comes out to 10% of the Town’s annual budget.

The good news is that the negative perception of a bankruptcy hanging over our small Town is now removed, but it doesn’t negate the fact that the effects of this settlement will most likely impact Town employees, police force salaries, etc.

The TOML will be deciding over the course of this next year on what cuts to make in order to facilitate the annual payments of the settlement.  More than likely, the Town’s budget will become more streamlined and hopefully, this change won’t affect our tourism, which fuels our local economy.

Posted October 28, 2012 by:

Verena Robinson, Broker Associate
DRE License #01512209
RE/MAX of Mammoth
toll-free (877) 924-8521
verena@mammothlakesresortrealty.com

Not only did the lending industry tighten up requirements for those looking to qualify for a loan on a primary residence, but the first to go was the “investment property” or “condo hotel” from most portfolio lenders’ pool of funds, and eventually, all lenders.  Why did this happen?  Or, what caused lenders to stop financing most condo purchases in resort areas?  Well, from what I understand, this restriction was due in large part to the Las Vegas condo hotel boom, and buyers flooding in to purchase based on the speculation to make rental income.  This eventually led to the classification for any and all resort condos (new or old) that had a rental office onsite to be blacklisted in the lending industry.  Both Bank of America and Chase will not loan on any condo purchases in Mammoth Lakes.  Wells Fargo Home Mortgage, Mammoth Lakes is the only lending institution that has been successful in funding loans for condos that were once included in the “condo hotel” classification.

This lending restriction has impacted property values negatively as purchases for these types of properties are limited to cash buyers.  However, there has been no shortage of cash buyers flooding in to buy these discounted “condo hotel” type units.  If the price is right, there are usually multiple offers on bank-owned properties or “REOs” (Real Estate Owned) that drive the price up over the asking.

The classic “condo hotels” such as the Village at Mammoth, which includes Grand Sierra Lodge, Lincoln House and White Mountain Lodge, Westin Monache and Juniper Springs Lodge have seen their share of distressed properties hitting the market over the past few years.  It is clear that a “bottom” has been reached at these developments with strong price support ranging between $215,000 and up for the 1-bedroom units and $350,000 and up for the 2-bedroom units. Many prospective cash buyers take a look at the convenience of either being slope side at the Juniper Springs resort or being in the center of it all (complete with Gondola access direct to Canyon Lodge, shopping, dining and entertainment), not to mention the impressive rental income that most of these units generate, and they can’t deny it’s a great lifestyle and future investment purchase at rock-bottom pricing.  The Westin Monache, which is located across the street from the Village at Mammoth, offers modern and stylish condo hotel suites, which have also been selling for rock bottom prices.  Out of any of the “condo hotel” projects, the Westin Monache is clearly the winner when it comes to the highest grossing rental income numbers in town.

Over the past few months, we’ve actually seen a couple of financed sales close for condo hotel units at the Village at Mammoth, Westin Monache, and Juniper Springs Lodge.  One of these lenders provided me with approximate terms and rates.  “Loan programs offered are for a term of 30 years, fixed for the first 3, 5 or 7 years, then becoming adjustable afterwards.  Rates will be in the low 5”s assuming 740+ credit.  Zero point programs for a $900 loan origination fee.  The minimum credit score requirement is 680, tough exceptions have been made.  70% financing for second homes and 50% for investment properties”.   Property qualifications include that condo hotel suites must have a full kitchen and bath, be a minimum of 500 SF, with no lending for studio units.

This could be the first sign of easing of lending restrictions, which has held the housing market and property values down over the past few years.  Prior to the financial crisis, as lenient as lenders were, they went 180 degrees in the opposite direction, and went overboard by overregulating the lending market.  This is what has unfairly held qualified and responsible buyers with income and credit scores out of the market.   Once financing becomes widely available for these condo hotels, pent-up demand will add to the competition, which will clear out the supply of the already low inventory, and prices will most likely begin to increase…

Posted August 27, 2012 by:

Verena Robinson, Broker Associate
DRE License #01512209
RE/MAX of Mammoth
toll-free (877) 924-8521
verena@verenarobinson.com

The Town of Mammoth Lakes has an ordinance, which strictly prohibits the “transient” rentals of single family residences (SFR).  A transient rental is defined as “30 consecutive days or less in exchange for a fee or similar consideration”.  The Town of Mammoth Lakes has a zoning map, which outlines the exact areas where nightly rentals are permitted — the pink shaded areas labeled “resort”.  The yellow shaded areas are labeled “residential” and transient rentals are not permitted in these subdivisions.  To access this PDF zoning map, please click on the following link, and click on zoning map: http://www.verenarobinson.com/mammoth-properties .

Only “resort” designated residential subdivisions are able to rent out their homes as transient rentals.  These resort designated subdivisions include: Greyhawk (Bridges Lane & Greyhawk Court), Juniper Ridge (Old Juniper Lane, Juniper Road, and Juniper Court), Lodestar Drive and Starwood.  Although Starwood is zoned “resort” the CC&Rs prohibit transient rentals.  If the homeowners within the “resort” designated subdivisions wanted to change this restriction in their CC&Rs, they would have to have a majority vote by the Homeowner’s Association to implement this change.

Many people ask “How will the Town find out if I decide to rent out my house on a nightly basis”?  For many years, the Town never went out of its way to enforce this ordinance, but lately, they have hired staff specifically for the purpose of monitoring suspected illegal rental activity.  It is unclear what the Town would impose on homeowners as fines, but a minimum of the Transient Occupancy Tax (TOT) of 13% would have to be paid for each night discovered.

Another common question that prospective buyers ask when they learn of this ordinance is “How can the Town dictate what I do with my property as fee simple ownership?”  This is a very good question.  It reverts back to the individual homeowners in Mammoth who enjoy the peace and quiet of not having transient rentals checking in and out of the house next door every few days…  The residents and home owners of Mammoth Lakes want to keep the zoning the way it is and would actively challenge any movement to change this ordinance.

I always recommend to clients who are considering a purchase in Mammoth, and want to generate rental income to offset their costs, to focus on condos and townhomes.  These are very user-friendly and easy ways of owning a vacation home property, which can legitimately generate income.

Another option to generate income on homes in Mammoth is to offer the property as a seasonal rental.  There are so many families from Southern California with kids on the ski team who are always looking for a residential seasonal rental they can share with another family.  There is a demand for this type of seasonal rental for homes that could be lucrative for the property owner to legally generate rental income.   To search for homes or condos in Mammoth, please click on the following link: http://www.verenarobinson.com/search-mammoth-properties .

Posted August 13, 2012 by:

Verena Robinson, Broker Associate
DRE License #01512209
RE/MAX of Mammoth
toll-free (877) 924-8521
verena@verenarobinson.com

MMSA had originally planned to expand the Mammoth Mountain and June Mountain ski resorts by building additional ski areas along the San Joaquin Ridge, which would connect both resorts.  Due to many unknown reasons, this vision never materialized.\n\nIntrawest had great plans to build a mixed-use development at the base of June Mountain ski area referred to as the “Rodeo Grounds”.  This would have included approximately 400,000 square feet of new residential space, and 25,000 square feet of commercial space

Clearly, over the past several years, there has been a strong anti-development group in June Lake, who didn’t want a “world class ski resort” in their backyard.  This vocal anti-development group, who proudly displayed bumper stickers saying “Don’t Mammoth June”, has jeopardized the economic stability and future of a resort that relies solely on tourism to survive.

It is my opinion that if Intrawest would have been welcomed with their development ideas and gotten approvals to expand the resort area, the June Mountain ski area may have possibly survived the current economic downturn as well as last winter’s lack of snow.  There appears to be an obvious connection between the timing of Intrawest’s abandonment of the June Mountain development plans and MMSA’s subsequent decision to close the ski area.

It was a difficult decision for MMSA, as it will impact the lives of the local residents, businesses and workforce.  However, it’s all about dollars and cents.  MMSA couldn’t continue to hemorrhage cash into an outdated operation.  The development of the June Mountain ski area would have promoted tourism and maintained interest in this resort area.  The resort needed to grow in order to have a sustainable future.  ”If you build it, they will come”.

There is a lot of competition for today’s tourism dollar.  The residents of the June Lake Village have to decide whether they want a thriving resort destination, and partner with development, or become the second ghost town in Mono County.

Posted July 1, 2012 by:

Verena Robinson, Broker Associate
DRE License #01512209
RE/MAX of Mammoth
toll-free (877) 924-8521
verena@verenarobinson.com

Properties are trickling onto the Multiple Listing Service (MLS), but at a very slow rate, and at significantly higher prices than recent sales comps would support.  If our supply continues to remain somewhat low heading into the busy summer selling season of mid-July through September, and demand is steady, the Mammoth real estate market could see property values stabilize.  This is one possibility.

However, those of us who follow what is going on behind the scenes realize that there is a glut of distressed properties that haven’t yet surfaced.  There are countless properties in Mammoth Lakes that are in default, but the foreclosure process has clearly slowed.  It’s hard to anticipate what type of government bail-out scenarios or incentives for homeowners who are upside down or under water on their properties, will take place over the next few months.  It is my opinion that simultaneously flushing out all distressed properties sooner, rather than later, and letting the market finally correct and recover would allow for a healthy rebound to take place in the real estate market.  Prolonging the inevitable is only creating a longer and more painful recovery.

What’s interesting is that the most commonly asked question over the past few years: “Are we close to the bottom yet?” seems to be asked less and less.  Perhaps the new question is: “What am I waiting for?”  Although it’s nice to pick an investment at the bottom, and sell it for a profit, that is difficult to do.  While the rate of decline in property values has significantly decreased, for many, we have gotten “close enough” to the bottom that any further downside risk seems insignificant when weighing the lifestyle benefits of buying sooner rather than later.

For those that love to come to Mammoth Lakes in the summer, this should be an excellent and long summer season with beautiful weather to enjoy the backcountry, mountain-biking, golf, fishing, tennis, and all of the wonderful activities that the Eastern Sierra has to offer for a good solid 3+ months.

Please feel free to navigate my website and search for current and up-do-date Mammoth Mountain Homes for Sale and other helpful information.

Posted June 4, 2012 by:

Verena Robinson, Broker Associate
DRE License #01512209
RE/MAX of Mammoth
toll-free (877) 924-8521
verena@verenarobinson.com

One would think that after the lack of snow Mammoth has seen during the 2011/2012 ski season, there would be a glut of properties hitting the market.  However, this has not yet happened.  Because we experienced such limited snowfall this past ski season, our skier visits were down substantially compared with the past few years.  In turn, our overall ski season tourism numbers were down as well. For those property owners who depend on the stream of rental income that the past few record-breaking snow years have brought, probably have felt the impact of the reduced rental income this year.

However, in answer to the question posed above, the answer appears to be “no”, at least not yet.  Our Mammoth Lakes spring real estate inventory continues to be lower than it’s been in previous years, and demand appears to be healthy for attractive and attractively-priced properties.

As of April 29, 2012, there are only 162 active condos and 57 active single-family homes on the market.  During this time of year, previous stats have been anywhere from 220 to 290 active condos, and 70 to 95 active homes on the market.  Our Mammoth real estate market sales data for year-to-date is as follows: 134 closed transactions 1/1/2012 to 4/29/2012, of which 30 were single-family homes, and 90 were condos.  Out of the 30 closed single-family home sales, 5 were REOs (Real Estate Owned – bank foreclosures), 10 were short sales, 1 probate, and the balance of 14 being traditional re-sales.  Out of the 90 closed condo sales, 15 were REOs, 28 were short sales, and 46 traditional re-sales.

As the warm temperatures set in next week for a steady period of highs in the mid-70 range, the snow will begin to melt fast.  Perhaps after ski season is officially over (if it makes to Memorial day weekend as planned), we may begin to see the large numbers of inventory hitting the market that would be expected after one of the most uneventful ski seasons in 20 years.  Or, maybe the bulk of the distress is gone from the market?  Stay tuned for the next post on REO inventory….

Posted April 29, 2012 by:

Verena Robinson, Broker Associate
DRE License #01512209
RE/MAX of Mammoth
toll-free (877) 924-8521
verena@verenarobinson.com

Location is still the most important factor when looking to invest in real estate.  Those properties that are located within walking distance or are “ski-in, ski-out” (The Bridges, Eagle Run, Sunstone, Juniper Springs Lodge, 1849, Sierra Megeve, etc.), golf course properties (Snowcreek 5 & Lodges, Timbers, Woodwinds, Solstice, Mammoth Green, The Cabins at Crooked Pines, etc.), or creekside/meadow area of Mammoth (Snowcreek 1-4, Creekhouse, Mammoth Creek, Snowflower, Sunrise) will be more attractive to investors and have greater resale potential.

If rental income or return on investment is important, buyers should consider well-managed complexes, such as the “condo hotels”, which have the highest rental income figures.  Some of these complexes include Juniper Springs Lodge, Sunstone, Eagle Run, Lincoln House, White Mountain Lodge, Grand Sierra Lodge, and The Westin.  Units within these complexes will receive the most exposure through a sophisticated advertising campaign to draw in the Mammoth visitor with attractive flight and lodging packages.  Currently, cash is required to purchase within a condo hotel.  Once financing is available at these complexes, the demand will most certainly increase.

When looking at the various property options, it’s obvious that newer construction will have the most current building and safety codes, and will imply that the property owner won’t need to worry about a looming large scale assessment to replace siding, roofs, windows, etc.   Most buyers are gravitating towards a newer development or newer construction home for those reasons.

Today’s buyer has many options, but it boils down to personal preference and price range on determining the best property for the ideal Mammoth investment or vacation home.

Feel free to post your comments, or contact me for more information.

Verena Robinson, Broker Associate
Re/Max of Mammoth
DRE License #01512209
verena@verenarobinson.com
toll-free (877) 924-8521

A short sale, by definition, is when the seller’s lender accepts a sale price on the property for less than what the seller owes on the mortgage.  Sometimes the seller has multiple notes on the property (a 1^st, 2^nd, and sometimes a 3^rd trust deed).  Usually, if there is a 2^nd or 3^rd on the property, this will make the approval process on the short sale very complicated, and much more challenging since there are many moving parts to juggle in order to satisfy the various lien holders.   In the recent past, short sales have been very difficult for borrowers with more than one trust deed on their property, since the sale of the property typically only paid for the first mortgage.  HAFA is now offering up to $3,000 for second lien holders.  Re/Max International Chairman and Co-Founder, David Liniger states: “Second trust lien holders are often owed five or ten times that of the $3,000 payment, but if the property goes to foreclosure, the second trust holder is not likely to get any money at all.  This, at least, guarantees something.”

Due to recent streamlined short sale incentives and rules, which allow borrowers and lenders to work together in order to avoid foreclosure, 2012 will see a much higher rate of short sale transactions going through compared to previous years.  These rules and incentives have been established by the Home Affordable Foreclosure Alternatives (HAFA) program to speed up the short sale process.  David Liniger, states: “The streamlined short sale process will definitely help homeowners”.   Under the HAFA program, the seller’s lender will provide pre-approved short sale terms before putting the home on the market.  This will greatly improve the rate and speed of the short sale process from start to finish. What used to take up to 4 to 6 months before hearing from the lender should now be a matter of weeks in 2012.

HAFA is also offering other incentives such as $1,000 to the loan servicer to cover administrative fees, up to $1,000 for mortgage investors who are agreeable to sharing the short sale proceeds with the 2^nd lien holder, and $1,500 to the homeowner to aid in relocation costs.   Liniger also states: “The moving expense allocation acts as an incentive for the seller to stay in the property until the short sale goes through.  Owner-occupied properties are usually in better condition than vacant homes.”  Although, with regards to the resort real estate market, like Mammoth Lakes, which is primarily “owner occupied”, but mostly second homes for many, the majority of properties that go to short sale are in far better condition than those you would find in the primary residence market.

According to the I.R.S., The Mortgage Debt Relief Act of 2007 allows the tax payer to exclude any categorized “income” from the discharge of a debt on their primary residence.  2012 will be the last year that sellers can sell their home for less than what they owe on their mortgage without paying penalties to the I.R.S.  After January 1, 2013, the amount that a lender forgives on a loan will be taxable on federal income taxes.  This will most certainly spur an increase in the number of short sales we’ll be seeing in Mammoth and surrounding areas in 2012.

During difficult economic times, a discretionary purchase, such as a second home, will be the first thing that a property owner will walk away from.  Since a short sale will impact a seller’s credit for a short length of time vs. a foreclosure, many sellers are motivated to go through with the short sale process.

Although our Mammoth real estate market inventory is very low at the moment, spring is typically the time of year when we begin to see many properties coming on the market.  Given the lack of snow during the 2011/2012 ski season, and the resulting reduced tourism and rental income, property owners who rely on the income that the ski season brings may flood the market with short sales this spring.

Stay informed with what the Mammoth real estate market is doing by signing up to receive my weekly market update on new listings and price reductions.

Feel free to post your comments, or contact me for more information.

Verena Robinson, Broker Associate
Re/Max of Mammoth
DRE License #01512209
verena@verenarobinson.com
toll-free (877) 924-8521