Will Mammoth Lakes Real Estate Values Decline in 2024?

Aerial View of Sierra Star Golf Course Properties Mammoth LakesBack in 2018, I remember thinking that the likelihood of values ever reaching over $600 per square foot would take several years (if ever).  Mammoth has historically been a sleeper town with not much intense demand in real estate to drive prices up.  There was the Intrawest boom in the late 1990s that lasted up until 2006.  Mammoth saw historically high prices for homes, condos and land.  After the financial collapse that started in 2008, many properties went back to the banks and the REO days came to light offering up real estate at severe discounts.  Those who were lucky enough to have bought at the bottom of the market in 2012 and still own have possibly tripled their investment since they purchased.  Then came the COVID-19 pandemic which brought unprecedented demand for an escape from cities and suburban areas.  Not long after the lockdowns began in April of 2020, curiosity and inquiries followed about investing in real estate in Mammoth Lakes.  The need to have a second, third or fourth home became what seemed to be an obsessive desire for many…  “The mountains were calling” everyone.   Then there is the component of “fear of missing out”.  The multiple offers returned, love letters to sellers, and suddenly what seemed like overnight, prices skyrocketed and have remained at record high levels. 

Although 2023 brought a series of steep interest rate hikes, it seems that buyers became accustomed to paying higher real estate prices.  The combination of limited movement on list prices, limited inventory and the desire to buy now vs. waiting are some of the factors which kept property values somewhat level.  The steep interest rates along with high inflation slowed down the real estate market in 2023, but not down to the levels that many had anticipated.  Values have remained high (seemingly everywhere) and especially in Mammoth.  Many buyers who were beat out more than once on multiple offers during the pandemic years stepped back after rates increased, inflation hit and the geo-political climate soured.  Intense demand and multiple offers were no longer “the norm”.  In 2023, buyers approached a property purchase in a less timely manner and with less urgency than in 2022, typically offering under the asking price. 

An In-Depth Review and Comparison of Condo and Single-Family Home Sales 2022 vs. 2023

Mammoth Lakes Condos for Sale

In 2023, there was a total of 231 condo sales. The average days on market were 548 for the high, 16 for the low, average was 95 and median was 56.  The highest priced condo sale was $2,250,000, lowest price was $350,000, average sales price was $869,708 and median price was $759,000.  The total condo sales volume in 2023 was $200,902,723. 

In 2022, there was a total of 336 condo sales.  The average days on market were 865 for the high, 0 for the low, average was 90 days and median was 53 days on market.  The highest priced condo sale in 2022 was $2,600,000, lowest price was $230,000, average sales price was $860,318 and median sales price was $750,000.  The total condos sales volume in 2022 was $289,902,723.

The overall average sales price for condos increased by approximately $9,000 in 2023.

Mammoth Lakes Homes for Sale

In 2023, there was a total of 63 single family home sales.  Days on market were 551 for the high, 15 days for the low, 83 average days on market and 62 median days on market.  The highest price paid for a home was $4,221,000, lowest price was $575,000, average price paid was $1,483,126 and median price was $1,299,000.  Total closed sales volume was $93,437,000.

In 2022, there was a total of 83 closed single family home sales.  Days on market were 473 for the high, 15 for the low, 91 average days on market, and 68 median days on market. The highest price paid for a house was $4,245,000, lowest was $500,000, average price paid was $1,527,253 and median price paid was $1,225,000.  The total sales volume was $126,762,000. 

Overall, the average price paid for a home in 2023 came down by $44,127.  Days on market remained very similar for 2023 as they were in 2022.   

What would possibly cause values to fall in 2024?

Although there is always a small pool of buyers who don’t need to rent out their vacation home to generate income, the majority need to (or prefer to) have an investment that can mostly offset costs of ownership or pay for itself.  Many times, the deciding factor between buying a house vs. a condo in Mammoth is the ability to generate income from short term rentals (STR).  Up until now, most of the condo developments in Town were able to rent nightly except for those developments located within “Residential” or “RMF-1” zoned areas (only a handful of condo developments).  A few months ago in October 2023, the Town Council voted to approve a moratorium on issuing any new rental permits to condos located within RMF-2 zoning.  This now includes any condos in the Canyon Lodge area and in various other parts of town.  The Town Council claims that the reason for imposing this temporary moratorium was to provide more workforce housing options for local residents.  They state that the pandemic created a frenzy which drove property values so high that locals can no longer afford to live in the immediate vicinity.  Any condo developments located within RMF-2 will not be able to rent for less than one month at a time upon transfer of title.  The Town Council did “grandfather” in any existing rental permits.  This new moratorium does not affect condo owners who have an existing rental permit and do not plan to sell nor any developments located within the “resort” zoned areas of Town. This moratorium was just extended to May 31, 2024.  It is possible that it can be extended into 2025. 

News travels fast…. Many buyers who were contemplating a purchase in condos located within RMF-2 areas quickly decided to wait or decided to pursue condos in resort zoned areas instead.  Because of this, the demand for any resort zoned condos noticeably increased.  The uncertainty of how long this moratorium will last and the ability to generate nightly rental income may impact property values for condos in 2024.   Since there is such a limited number of condos on the market to begin with, appraisers are limited on what they can use for comparable closed sales when doing appraisals for financed transactions.  A drop in values for RMF-2 zoned condos could affect values overall (for the condo sector).  Currently, these are the only condo developments in Town that are exempt from this rental permit moratorium and are free to rent nightly: Aspen Creek, Juniper Springs Lodge, Juniper Crest, Sunstone, Eagle Run, Bridges, Altis, Mammoth Green, Cabins at Crooked Pines, Solstice, Timbers, Stonegate, Villas at Obsidian, The Reserve, Grand Sierra Lodge, White Mountain Lodge, Lincoln House, Westin Monache, and Snowcreek (all phases including Creek House).

Often times when the outlook appears bleak is typically when it is the best time to buy.  Take advantage of the negotiating power without competition to get a better price today rather than waiting when the market could see another wave of demand once interest rates come down as expected.  We could easily see prices increase again when demand is strong again. 

If you are not already working with an agent and would like to receive listing notifications or have questions on any listings, please contact me directly. 

Thanks for reading and happy New Year!

Verena Robinson, Broker/Owner
CA DRE 01512209
Mammoth Lakes Resort Realty
760-924-8521 Office Direct

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