Mammoth Lakes Market Trends September 14, 2018

Fall Colors at Lake Sabrina out of BishopThe past few days have seen much cooler temperatures and high winds in the Eastern Sierra.  This is the time of year when the distinct and noticeable change from summer to fall arrives.  The pine trees shed their brown needles, the Aspens start to turn colors, and the countdown to ski season opener begins.  I enjoy the transition into fall when football games are back on and the town becomes quiet and peaceful after the busy summer season.  The transition from summer to fall brings a great time of year for colorful and scenic fall hikes.  Some of the wonderful areas to experience vibrant fall colors are Rock Creek Lake, the Coldwater Canyon trails, Mammoth Crest trail, Mammoth Rock trail, June Lake, Virginia Lakes, Lundy Lake, etc.   The temperatures are cooler, the colors brighter, no mosquitos, and the sun angle creates a beautiful shimmer on the lakes, which can be seen from above on most trails with lake views.  Having just returned from Del Mar for a few days last week, the weather there was unusually cool and overcast for early September.  It wasn’t the best beach weather, but the ocean temperatures were very warm at 78 degrees.  The water was warmer than the air temperature.  This definitely made me wonder what kind of an effect the warm ocean temperatures may have on our winter precipitation, and prompted me to do some research about what is currently forecasted. 

BURIED CHAIR LIFT AT MAMMOTH MOUNTAIN JANUARY 2017Although we’ve all probably realized over the past few years that long-range weather forecasting for California is not always accurate, we still look towards forecasting data in hopes of what might promise BIG SNOW, not only for our ski season, but for Southern California’s water supply. I remember when we were heading into the 2016/2017 winter season, none of the forecasting data picked up on the massive precipitation we ended up receiving.  It started out as an exciting and pleasant surprise when the forecasts started to show several feet of snow coming after the 1st of the year (2017), and then turned into “too much of a good thing” and overwhelming after a series of powerful storms.  A normal year would be wonderful and make everyone happy (my opinion).    So far, NOAA is stating the following forecast for Southern California’s winter season: “AREAS OF PROBABLE ABOVE NORMAL PRECIPITATION IN LATE WINTER 2018-2019 AND EARLY SPRING 2019 OUTLOOKS WERE EXPANDED WESTWARD INTO SOUTHERN CALIFORNIA, REPRESENTING IMPACTS OF THE POTENTIAL SHIFT IN THE STORM TRACK DUE TO EL NINO.”  Although anything is possible with the weather, based on this data it’s looking like it could be a good ski season ahead. 

Many people ask, “when is the best time to buy in Mammoth?”  In previous years, my answer has always been to wait until spring/summer when the inventory increases and demand decreases.   However, the dynamic in the Mammoth real estate market has changed, and this advice no longer seems to apply as “a rule of thumb”.  This past year has demonstrated that sellers realized prices were on the rise.  As a result, the majority of condo sellers didn’t reduce prices or come down much (only those that had to sell).  They probably figured that if they waited long enough, they would eventually get close to their price.  Heading into winter, and if we end up having a great snow year, nothing creates a buying frenzy more than lots of snow on the ground.  The demand for Mammoth real estate, along with the higher prices buyers are willing to pay during a good winter season, will drive prices up even higher.  This in turn resets the comparable sales to higher amounts.  So, my new answer to the question “when the best time to buy in Mammoth?” is “now” regardless of the season and inventory count.  Evidently, Mammoth is emerging from the doldrums of lack of demand and discounted property values to healthy demand and rising prices. 

MOUNTAINBACK 3 BED CONDO CLOSE TO CANYON LODGEIn contrast to years prior, suddenly buyers are consistently willing to pay these higher prices, and in some cases, over the asking price.   A perfect example is a Mountainback I have listed.  This condo is located very close to Canyon Lodge and features great views, a comfortable floor plan, underground parking and resort amenities.  After just a few days on the market, there were multiple excellent offers way over the asking price with appraisal contingency waived.  Although the Canyon Lodge area seems to be the preferred location for a potential condo or house purchase lately, in speaking with the appraiser who was assigned to do the appraisal inspection, he explained that this is happening all around town.  Quite a few of the recent appraisal assignments have required the appraiser to make complex adjustments in an effort to try and get close to the contracted purchase price and keep us with rising prices.  One example he used was the Village at Mammoth, specifically at Lincoln House, which has increased dramatically over the past two years.  Although the appraiser makes adjustments to factor in increased demand and rising property values, he is only able to adjust within limits.  The banks are looking for recent sales to compare to within the same complex.  If there are recent sales within the subject complex, he has to make adjustments based on floor number, views, orientation, floor plan, improvements, etc., and cannot look outside of the complex for similar units in trying to obtain an estimate of value.  What this means for a financed offer with appraisal contingency waived is that the buyer would then have to come in with additional cash (to the down payment) to make up the difference between the contracted purchase price and appraised value.  For example, let’s say a buyer is under contract for $500,000 on a property and is putting down 25%.  The loan to value is 75/25 of what the bank is willing to lend.  If the appraisal comes in short at $450,000, the bank will only lend 75% of that value, which would be $337,500.  The buyer would have to come up with an additional $37,500 to keep the deal going or renegotiate with the seller.  According to the appraiser, this is has become common and would indicate that buyers are feeling secure about purchasing in Mammoth and/or Mammoth’s future.  I personally view any and all other positive factors such as new ownership of the Mountain, a promising ski/snowboard season, development in the coming years, etc., as enhancements for reasons to own property in Mammoth. 

Bridge with Sherwin Mountains in BackgroundAs I mentioned in a previous blog post, Mammoth’s future does seem to be brightening.   Driving around town, new construction is evident from single family homes to grocery stores to townhome developments, etc.  There is also excitement about the new “Ikon” ski pass. But, more than anything, Mammoth Lakes is an area of just four square miles with limited real estate opportunities.  Given the growing interest and increase in tourism, more and more people are discovering Mammoth.  As the population in Southern California and other areas continues to expand, more people will likely seek out Mammoth as an escape, or to call home.     

For questions about any real estate listings, please feel free to contact me directly.

Thanks for reading.

Verena Robinson, CA DRE 01512209
Broker/Owner
Mammoth Lakes Resort Realty
760.924.8521 office/direct – no text messages
verena@mammothlakesresortrealty.com

 
Many people ask, “when is the best time to buy in Mammoth?”  In previous years, my answer has always been to wait until spring/summer when the inventory increases and demand decreases.   However, the dynamic in the Mammoth real estate market has changed, and this advice no longer seems to apply as “a rule of thumb”.  This past year has demonstrated that sellers realized prices were on the rise.  As a result, the majority of condo sellers didn’t reduce prices or come down much (only those that had to sell).  They probably figured that if they waited long enough, they would eventually get close to their price.  Heading into winter, and if we end up having a great snow year, nothing creates a buying frenzy more than lots of snow on the ground.  The demand for Mammoth real estate, along with the higher prices buyers are willing to pay during a good winter season, will drive prices up even higher.  This in turn resets the comparable sales to higher amounts.  So, my new answer to the question “when the best time to buy in Mammoth?” is “now” regardless of the season and inventory count.  Evidently, Mammoth is emerging from the doldrums of lack of demand and discounted property values to healthy demand and rising prices.  
 
In contrast to years prior, suddenly buyers are consistently willing to pay these higher prices, and in some cases, over the asking price.   A perfect example is a Mountainback I have listed.  This condo is located very close to Canyon Lodge and features great views, a comfortable floor plan, underground parking and resort amenities.  After just a few days on the market, there were multiple excellent offers way over the asking price with appraisal contingency waived.  Although the Canyon Lodge area seems to be the preferred location for a potential condo or house purchase lately, in speaking with the appraiser who was assigned to do the appraisal inspection, he explained that this is happening all around town.  Quite a few of the recent appraisal assignments have required the appraiser to make complex adjustments in an effort to try and get close to the contracted purchase price and keep us with rising prices.  One example he used was the Village at Mammoth, specifically at Lincoln House, which has increased dramatically over the past two years.  Although the appraiser makes adjustments to factor in increased demand and rising property values, he is only able to adjust within limits.  The banks are looking for recent sales to compare to within the same complex.  If there are recent sales within the subject complex, he has to make adjustments based on floor number, views, orientation, floor plan, improvements, etc., and cannot look outside of the complex for similar units in trying to obtain an estimate of value.  What this means for a financed offer with appraisal contingency waived is that the buyer would then have to come in with additional cash (to the down payment) to make up the difference between the contracted purchase price and appraised value.  For example, let’s say a buyer is under contract for $500,000 on a property and is putting down 25%.  The loan to value is 75/25 of what the bank is willing to lend.  If the appraisal comes in short at $450,000, the bank will only lend 75% of that value, which would be $337,500.  The buyer would have to come up with an additional $37,500 to keep the deal going or renegotiate with the seller.  According to the appraiser, this is has become common and would indicate that buyers are feeling secure about purchasing in Mammoth and/or Mammoth’s future.  I personally view any and all other positive factors such as new ownership of the Mountain, a promising ski/snowboard season, development in the coming years, etc., as enhancements for reasons to own property in Mammoth.  
 
As I mentioned in a previous blog post, Mammoth’s future does seem to be brightening.   Driving around town, new construction is evident from single family homes to grocery stores to townhome developments, etc.  There is also excitement about the new “Ikon” ski pass. But, more than anything, Mammoth Lakes is an area of just four square miles with limited real estate opportunities.  Given the growing interest and increase in tourism, more and more people are discovering Mammoth.  As the population in Southern California and other areas continues to expand, more people will likely seek out Mammoth as an escape, or to call home.      
 
For questions about any real estate listings, please feel free to contact me directly.
 
Thanks for reading.
Verena Robinson, CA DRE 01512209
Broker/Owner
Mammoth Lakes Resort Realty
760.924.8521 office/direct – no text messages
verena@mammothlakesresortrealty.com

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