Info about Radon in the Eastern Sierra

Friends/Clients/Locals,

I recently encouraged a client of mine to test for radon in the house they are buying in Crowley Lake and it came back with high levels of radon.  In doing more research, I found that few people know about radon, so I am writing to let you know what I have learned and to encourage you to test your home and workplace.

RADON:

• According to the California Dept of Public Health, radon is the 2nd leading cause of lung cancer (behind smoking).  See chart below.
• “Radon is a naturally occurring radioactive gas that is odorless, invisible, and without taste.  It is released during the natural decay of uranium, which is present in most rock, soil and water.  Its occurrence in the state is influenced primarily by geology.”
• “The average indoor radon level is estimated to be about 1.3 pCi/L (pico Curies per Liter of air), and about 0.4 pCi/L of radon is normally found in the outside air.”
• If your home/office has higher than the “action level” of 4 pCi/L, the EPA recommends doing a second test and averaging the two results.  If still above 4 pCi/L, they recommend doing mitigation.
• Lots of more info at the EPA's website.

FREE TEST KITS: Mono County is one of a few counties for which the state is offering free radon test kits to property owners.  Go to the Mono County Health Dept (above Giovanni’s) and pick up a free kit.  They just received a shipment of 100 kits.  The kits are a tray of charcoal that you let sit for 48 hours (follow directions carefully!) and then mail in to a lab.  Please direct questions to: Louis Molina, Environmental Health Director, Mono County Health Department, (760) 924-1845, lmolina@mono.ca.gov.

RADON CONTRACTOR:  If you want a radon contractor to do a more detailed test or to have your home fixed if you have high levels of radon, Greg Enright is the only local Certified Radon Tester and Mitigator: greg@gregenrightconstruction.com and (760) 937-2287.

MITIGATION: Mitigation for homes with crawl spaces usually involves covering the dirt in the crawl space with plastic, then ventilating the captured air up a pipe and out through the roof.  This website has more info.  This method is supposedly effective.  Cost for standard installation is approx. $1,800 + $1/sqft of crawl space for materials, fan, electrical, permit, etc.  So, for a standard 2,000 sqft 2-story house with 1,000 sqft of crawl space, the cost would be approx. $2,800.  You should consult with a contractor for a detailed quote for your home.

LOCAL EXAMPLES: According to the California Dept of Public Health, as of May 2010, 32 radon tests had been done in the 93546 zip code (Mammoth Lakes + Crowley Lake) and 10 of them (31%) resulted in radon levels above 4 pCi/L.  In Bishop, out of 111 tests, 39 (35%) had come back high.  According to local experts, Crowley Lake and West Bishop have shown higher than average levels of radon.  But, one house might have high levels and the house next door might have low levels.  There is not a lot of data for our local area, so I am encouraging everyone to test for radon and share results with me or the Mono Co. Health Dept.  Also, the labs that analyze the free test kits also enter the data into an anonymous database.

SHARING DATA: If you are willing to share your results with me, I will start a database and share aggregate results with you.  When sharing your results with me, please tell me your address, date of test, results of your test, and if you are willing to share your results with others.  I will only share the results by neighborhood, not by specific addresses (to protect privacy).

I strongly encourage all local residents and homeowners to test for radon in their homes and work places and share results so that we can protect our community!

Disclaimer: I am far from a radon expert. Please consult the websites listed in my blog for more information.

Please get your free test kit today and please share this blog with friends and coworkers.  Thank you!

-Dennis

Live where Olympians Live!

Just Listed For Sale – Wonderful Home in The Knolls, Mammoth Lakes!

Just one block from The Village at Mammoth sits this nicely-sized 3 bedroom, 2.5 bathroom 2-car garage house on a corner lot in the desirable neighborhood of “The Knolls.”  Drenched in sun, the home has plenty of deck space to capture it.

141 Mammoth Knolls Dr. has a very easy floorplan with two bedrooms downstairs with a guest bathroom and laundry room.  Upstairs you will find a wide open living area with lots of windows and a recently upgraded kitchen (done by highly-regarded local craftsman) with GE stainless appliances.  Just beyond the powder room is the master suite with walk-in closet and more views.

Great neighborhood with lots of nice homes and easy access to the following:
• The Village (shops, restaurants, entertainment): Only 400 yards away.
• The Village gondola: 650 yards
• Uptown/Downtown mountain bike trails: 275 yards.
• End of the new ski-back trail: 470 yards
• Main Lodge of the Mammoth Mountain Ski Area (The Knolls is the last subdivision on Minaret before the road up to the ski area): 4 miles.
• Running trails on U.S. forest service land: right out the backyard.

Get more info and video about this great house at www.MammothKnollsHome.com.  Asking price is $649,000.

My friend, Olympic marathon silver medalist, Meb Kelezhighi, lives in this house and has trained in Mammoth for all of his major marathon wins.  Just down the street, I recently sold the house of Olympic runners Ryan and Sara Hall.  Olympic swimmer, Roy Saari, used to live on Ryan’s street.  Just across from them, I put Kelly Clark (Olympic Snowboarder) into a nice house.  Across town lives my friends Deena (Olympic marathoner) and Andrew Kastor.  Live where the Olympians live!   -Dennis

Spring in Mammoth - Real Estate Market update

The real estate market in Mammoth Lakes has turned.  A few of our buyers have been beat out by other bidders in multiple-offer situations recently.  And some have had to come up in price over what they originally planned to pay.   It definitely feels like a shift from a buyer’s market to a seller’s market.

One way this has become apparent is in the sales-to-list price ratio.  This is the percentage of the final sales price divided by the latest list price of the property.

In the Mammoth condominium market since last summer, the sales-to-list price ratio went from 95% to 97% to 96% and is currently at 95% this spring.  It spiked last fall when there was a rush on condos right before the ski season.  And it has now fallen to give way to the single family housing market, which is typically stronger than condos in the spring/summer seasons.

For non-REO single family homes, the average sales-to-list price ratio had been 94-95% in the three seasons prior to this spring.  All of a sudden, it jumped up to 97% this spring.  Nationally, the ratio is currently 97% as well.

The way these numbers manifest themselves is during contract negotiations.  It used to be that buyers would feel comfortable offering 80-90% of the asking price and then end up settling on a price in the low 90%-range of the asking price.  Sellers were glad to receive an offer and come down in price.

Now, we are counseling buyers to go in stronger or else their offers will not be taken seriously or even responded to.  And often, there are multiple offers to compete against.  Sellers have become emboldened to list their properties higher to begin with and end up with a sales price that is higher than recent comparable sales.

So, is it time for buyers to panic … have they missed the bottom of the market??  I have a hard time believing that this market is going to be as hot as it was in the 2003-2005 period when we have 20+% appreciation each year.  In addition, spring is the time of year when our inventory tends to swell and more choices come onto the market.  Wait for the right property and let us help you with some up-front research into financing options, the ins and outs of homeownership in Mammoth, and the differences between various condo complexes.

Meanwhile, the flowers are out early this spring.  But there is still skiing to do (through Memorial Wknd).  Fishing opener on Crowley Lake was a success.  And we've both gotten our trailers out of winter mode and gone camping with the spouses and kids.  Life is good!

HOA Dues - What they include and how they compare with costs from owning a house

HOA Dues

Homeowner dues (HOA dues) get a bad rap.  Especially when they exceed $1,000/month.  Those are some crazy numbers, but not all of the dues are frivolous and they should not make buyers turn up their noses at condominiums and start running for the single family homes.  But when we tell them that you cannot rent most single family homes out on a nightly basis in Mammoth Lakes, most buyers turn reluctantly back toward condos and ask what are included in HOA dues.

Many are surprised to find that a good portion of HOA dues are costs you would incur anyway if you were to own a house.  So let’s take a look at the ‘Apples to Apples’ costs and then uncover which fees are more like ‘Apples to Oranges.’
Both of us own both a single family home in Mammoth and a rental condo, so we looked at data from both of Dennis’ properties.  

The condo complex where I own a rental condo is fairly average for Mammoth; 84 units total built in the mid 70’s.  Amenities include a pool, two spas, a sauna, laundry room, landscaping and a lounge/reading room.  It does not have covered parking, an elevator or common area storage facilities.  The HOA dues I pay for a studio+loft/2-bath unit are $410/mo.  The annual expenses in 2011 (a big snow year) for the complex were $321,273.
My house is also fairly average; 4 bedrooms, 3.5 bathrooms, 2-car garage. approx 2484 sqft and built in 1992.

Apples to Apples costs:

Snow removal: Condo complexes plow snow from the parking lots and also remove snow from walkways.  At the complex where I own a rental condo, snow removal in 2011 was $31,635, or 9.8% of the annual budget, or $377/unit/yr.  (I will boil down all condo costs to this $/unit/yr in order to compare with my costs associated with my house.)

Most single family residence (SFR) homeowners have a contract with a snow removal service for approx $900/winter.  (Incidentally, the alternative to a winter-long contract is to pay on a per-plow basis at around $45/plow.)  Many other owners, including me, remove snow themselves with a snowblower.  My cost is limited to snowblower maintenance, fuel, and my time.  For this exercise, let’s call it $30/yr.

Water: Most (93%) condo complexes include water and sewer fees in their dues.  My condo complex spent $32,130 in one year ($382/unit/yr).
You obviously also need water/sewer at a SFR.  My bills average about $600/yr; less in winter, more in summer because I have a lawn to water.  If your SFR has less grass, then your water bills should be less.

Trash: $150/unit/yr for the condo vs. $214/yr for the SFR.  I take my trash to the dump to save some money; fees would be $456/yr if you order curbside pick-up service.

Insurance: As a condo owner, you will share the cost for an insurance policy on the buildings and common area.  Most owners carry a separate, smaller, policy to cover furnishings and maybe liability coverage if their condo is on a rental program.  As a single family homeowner, you will also have insurance for the building and the contents.  Condo: $314/unit/yr for common area insurance + $336 for our individual condo policy = $650/yr.  House: $1,254/yr.

Landscaping: Complexes will pay landscapers to get the grounds ready each spring for grass and/or flowers and keep them beautiful during the summer (mow, weed, trim, etc).  In the fall, they will blow out the sprinklers and put down the necessary winterizing fertilizer.  If you own a home instead, you may choose to have the native landscape look…Manzanita bushes, pine trees, aspens, rabbit brush, sage brush, rocks, etc.  But if you have grass or want the wildflowers not to look so wild, you will incur some costs here.  Condo: $43/yr, house: $406/yr (not including my labor).
Summary for Apples to Apples: Adding up the costs above, I spent $1,602 for these categories for the condo and $2,504 for the house.

Apples to Oranges:

And here are the parts of HOA dues that may not necessarily translate to costs incurred when owning a house or are hard to compare:

Common Area Utilities: My condo complex uses propane to heat the pool and spas and electricity to light the complex and run the office.  Comes out to $599/unit/yr.  I cannot determine what portion of my SFR utilities go to exterior lighting and to heating our spa.

Reserves: Condos usually hold funds in reserves for capital improvement projects.  A portion of the monthly HOA dues go directly toward the reserve funds.  Projects usually include re-paving the driveway, re-roofing, or re-doing the siding.   Ideally, if you own a home, you should have a savings plan to be ready to buy a new roof after its useful life is up.  In a homeowners association, you may not be directly benefiting from every reserve dollar that you spend, as you may not own the condo in 25 years when the balconies need to be re-done.  However, the owners before you have been pitching in for a while, so you are benefiting from their dues.

In 2011, the condo complex collected $825,808 in normal HOA dues + special assessments.  38% was allocated toward the operating fund, 1.5% to a contingency fund, 50% to the current special assessment for building rehab and 10% to the replacement fund (reserves).  My cost: $1033/yr for the condo, $0 for my house (though I should set aside some money to paint my house this year or next).

(Special Assessment): When reserves are not high enough to pay for a needed project, special assessment can occur and can be costly.  Different complexes have different philosophies; some have low HOA dues and then charge special assessments for many projects; others charge higher dues and then pay for the projects fully out of the reserve funds.

Maintenance: Asphalt, Buildings, Landscaping, Pool/Spa, Tools and Equipment, Vehicle Expenses (i.e. the truck that the manager uses to transport materials/tools, etc).  Condo complex: $464/unit/yr.  SFR: approx. $2,000/yr.

Management: Larger condo complexes (like the one where I own) hire an on-site manager to live and manage the grounds.  They are always sweeping pine needles, tearing off ice dams, cleaning the pools, etc.  They also enter the unoccupied units every so often to make sure windows are closed, lights are off and no pipes are leaking.  Smaller complexes hire a manager to come by a few times per week to walk the grounds and do maintenance.  This is the largest line item in our condo complex budget at $102,564 (44% of total): $1,221/unit/yr.  

Some 2nd homeowners opt to hire a similar service, like www.AbsenteeHomeowners.com to make sure pipes do not burst during a cold snap or to turn up the heat before an owner’s arrival and to perform ad hoc projects.  Prices vary on service provided.  My cost: $0/yr.

Other: Accounting Services, Board Meeting expenses, Legal Services, Office Supplies, Office Telephone.  Condo complex: $318/unit/yr.  Most homeowners do not incur extra accounting fees or hold board meetings to discuss the operation of their house!  So these fees would be considered extra for owning a condo, but the benefits are for an organization that is supposedly looking out for the best interest of the property overall.

Summary for Apples to Oranges: Adding up the costs above, I spent $3,635 for these categories for the condo and $2,000 for the house.

Final Thoughts: 

Overall, it would appear that the purchasing power of an 84-unit association saves money on the apples-to-apples costs of a condo vs. a home.  However, the apples-to-oranges costs are hard to compare and do include extra costs that you would not incur if you owned a home, but comparing a condo and a home is not like comparing apples to apples to begin with.

When evaluating condos and their HOA fees, be sure to account for some of the differences in dues. Some condos have different amenities than others (some may only have a spa whereas others with have multiple spas, swimming pool, tennis courts, recreation rooms, etc.)  And some complex’ HOA fees include cable TV, internet and, in some cases, propane.

HOA dues seem to always go up and never down (i.e. to keep up with inflation).  And you may not have much control over them unless you are influential on the board of homeowners.  But they do pay for some costs that you would incur with owning a house and do provide owners and renters with amenities that you might not have at your house.

And you may be wondering just where on earth you can see $1,000/mo HOA dues?  Well, Intrawest built some places where the HOA pays to heat extra common areas (like garages and walkways) with propane, which is currently pretty expensive. The larger floorplans at Cabins at Crooked Pines, Solstice, Eagle Run and The Village all have dues in excess of $1,000/month, however they do include propane and hot water costs so essentially a good portion of your heating bill is covered in the HOA fees.

If you have specific questions about HOA dues or real estate in Mammoth Lakes, CA, please contact Dennis or Tara or visit our website, www.MammothRealtySearch.com. 

Lowest Inventory since 2006

As with many areas in California, the inventory of properties for sale is currently pretty low.  As of today, there are only 111 condos and 40 homes for sale in Mammoth Lakes.  We have not seen this kind of a ‘drought’ since 2006, the last time the market was “hot.”

As you can see from the Graph #1 below, inventory levels (green line indicates # of condos, homes and lots for sale) grew to their highest levels in August 2007 with 315 condos and 107 homes on the market.  Inventory remained high while the market was bad from middle of 2006 until middle of 2009.  When people started buying again in 2009, inventory dropped and we returned to a seasonal market with inventory going up in spring (see the peaks in summer 2010 and 2011) and declining in winter.

REO’s / Short Sales: Even the inventory of foreclosures and short sales has dried up.  The most amount of condo REO’s on our market at one time was 16 back in spring 2011.  The height for short sale condos was 39 back in summer 2009.  We currently have 5 foreclosures and 5 short sales in the condo segment. (There is only 1 single family home foreclosure right now and no short sales).

Supply: When the market tanked in '08, sales were very slow and our supply (defined by inventory divided by sales pace) slowed to 48 months for condos.  This means that it would take 48 months at that slow sales pace to sell all of the condos on the market.  In contrast, the quickest supply was down to 1 month in November 2005 and it is currently 4.1 months.

Our numbers actually mirror the national supply numbers.  The National Association of Realtors reported a supply of 4.4 months at the end of December 2012, which is the lowest supply since May 2005 when it was 4.3 months.

Prices: Prices in certain segments have started rising a little bit.  The $/sqft on Intrawest condos at The Village, Westin and JSL/Sunstone peaked at $925/sqft in 2007 and dropped to $375/sqft in 2012 (a 60% drop).  See Graph #2 below.  So far in 2013, it is inching up to $377/sqft.  Anecdotally, we are seeing emails from other agents trying to fish out listings for buyers who are anxious for units at The Westin (which has been getting excellent rental income) and for homes right by the slopes.

So, it has been turning from a buyers’ market to a sellers’ market.  If a property is priced appropriately, it gets lots of attention and usually gets multiple offers and sells quickly.  And negotiations for other things like requests for repairs and other concessions during escrows are tipping back toward the seller.  The sentiment is that we have hit the bottom of this real estate cycle and there is urgency to get in while prices (and interest rates!) are still low.

If you are a buyer, keep a watchful eye on your favorite Realtor’s website.  Sites like Zillow and Trulia often have outdated information and old listings.  It is best to go right to the source; the MLS Search on our website is updated daily with the most accurate information on all of our listings in Mammoth and surrounding areas.

If you are a seller, congratulations…you survived the downturn and may start to see an increase in the equity of your property.  If interested in getting our opinion of what your property is worth, email us the basic details on your property.  And if you are seriously thinking about selling, talk to us; we can go over our marketing package and perform a Comparative Market Analysis on your property to further dial in a value.

In the meantime, the snow quality has been excellent on the ski resort.  Both of us need to get out there more!

Best,
Dennis & Tara


More on Graph #1 below: The blue line shows the average Days on Market for all listings on that day.  It makes sense that when a bunch of new listings come on the market at once, the average DOM drops.  What we are seeing right now is that many of the newer listings are priced right and disappearing from the inventory right away, leaving the overpriced listings that have been on the market for a while.  This is what is causing the red line (difference between inventory and DOM) to drop to levels not seen since December 2003 when there were only 34 condos on the market!  This was before Intrawest built a few hundred units in the Village and the overall pool of condos increased.

Graph #2: Price/sqft for select Intrawest condos:

Mammoth Lakes Bankruptcy and Current State of Our Real Estate Market

A lot of people have been asking us lately, “What impact do you think the Town’s declaration of bankruptcy will have on the real estate market?”.  Good question.  In looking at the list of FAQ’s that was put out by The Town of Mammoth Lakes, (clickhere for FAQ regarding Town bankruptcy), as well as reading about what bankruptcy has meant for other communities, the answer could really be that there may be little or no impact on the town as residents and visitors see it.  As with most towns/counties that declare bankruptcy, many cuts have already been made in an attempt to avoid the bankruptcy.  We are still in bankruptcy court, so we won’t really know the “bottom line” until we’ve gone through this process.  Again, the frequently asked questions (link above) answer a lot of questions and are probably the best source of information for anyone who is wondering.

 As far as the general real estate market here in Mammoth goes, we have continued to have an active market.  In general, the low end of the market has been the most active whether you’re talking condos/townhomes or single family homes.  Buyers are all looking for a “deal” and there are plenty of deals out there right now.  When something does come on the market and it’s aggressively priced, it will typically see multiple offers.  

 An interesting indicator is our property inventory.  In a “typical” spring / summer, we tend to see the inventory (number of units on the market) go up considerably towards the end of spring and beginning of summer (summer really kicks off in Mammoth around the 4^th of July).  Then, as we get closer to the end of summer and early fall, we’ll start to see the inventory go down as more places sell and some sellers pull their properties off the market since they know they’ve got rental income coming in.  So far, both our condo inventory and our single family home inventories have remained fairly low and pretty steady as far as the number of properties for sale.  Properties are coming on the market, but just as many seem to be selling. 

To give you an idea of what kind of numbers we’re comparing, when we had a LOT of condos on the market, our inventory was at about 330, give or take.  Houses were around 86-90 houses on the market.  Right now (and fairly consistently for about the past year), we have at any given time about 160-165 condos on the market and about 60-65 houses on the market.

Call or email us should you have ANY questions.  Thanks for visiting!

Tara Peterson, sierraTLC@earthlink.net , 760-408-9611

Dennis Cox, dennis@denniscoxrealestate.com , 760-920-0878

What condos sell during winter vs. summer in Mammoth?

Question: What types of condos sell in the winter versus the summer in Mammoth?

Answer: Good question. I have always felt like buyer interest is focused on condos near the ski slopes in the fall and winter and then shifts down towards town and the meadow in the summer. To support my theory, I looked at the sales data for all 3,916 condos sold in Mammoth in the last 10 years. I graphed their location by what month of the year they closed escrow and found some interesting results:

Overall, the three most popular months for closed escrows on condos are October, November and December (in declining order). This follows from experience; fall is always a busy selling season here in Mammoth as buyers get in the skiing mood again and try to procure a property before the ski season gets underway.

The slowest months are January, May, June and July (in declining order). January makes sense because not that many escrows start in December when there are two weeks of holidays and many condos are rented (even the ones on the market). And then early summer makes sense for being slow as the season transitions from winter to early summer, which is the 'shoulder season' here in Mammoth when there are the least amount of vacationers.

Overall, 455 condos closed escrow in October and only 264 in July during the past ten years.

SLOPESIDE Effect: Now sifting by location, I first segmented condo complexes by “slopeside” and not slopeside. I define “slopeside” as being within easy walking distance to the ski slopes or the Village gondola. Complexes like Chamonix and Juniper Springs Lodge would be slopeside and Seasons IV and Snowcreek would not be.

Slopeside condos sell mostly in the winter with October hosting 206 sales vs only 73 in July (35% of the Oct number). With non-slopeside condos, the lull is in June and was only 59% of the November peak, so while slopeside condos still outsell ones away from the slopes, the swings are not as intense.

And when I lumped individual months together into seasons, the sales away from the slopes are more steady throughout the year (sales during the lull is 71% of the high time) and the slopeside condos definitely show a stronger variance between winter (strong sales) and summer (the lull is 46% of the high tide).

So my theory is confirmed that sales are concentrated at the slopes during the late fall and early winter while interest tends to shift away from the slopes after wintertime.

RESORT CORRIDOR: I decided to look at location in another way and segment condos by “resort corridor” and non-resort corridor locations. For “resort corridor,” I include all of the above slopeside condos and throw in golf course locations (Solstice, Woodwinds) and meadow locations (Sunrise, Snowcreek) since these are along shuttle routes and do well on nightly rental programs. Non resort corridor locations are like Bigwood, Krystal Villa West/East and condos out in Old Mammoth.

The verdict is similar, with resort corridor condos selling in Oct-Dec vs. Jul-Sept at a rate of 908 to 506 (44% difference). For non-resort corridor condos, again, the swings are not as intense; the peak (Oct-Dec) outsells the lull (Apr-Jun) 342 to 221 (only a 35% difference).

Inventory in the above segments are directly affected by this seasonality. Because October to December are hot selling months, overall inventory declines throughout winter. Then in early summer, when sales slow a bit, inventory increases. Each of the last three Julys have seen condo inventory above 350 condos for sale. And each of the subsequent Decembers have seen inventories drop by at least 22%.

As a buyer, you will usually have more choices in the summer. If you are in the market to buy a condo in Mammoth and can resist the urge to buy something in the fall when you have increased competition, you might find better deals in the summer.

If you are a seller, you may want to capitalize on the slight feeding frenzy that typically happens in fall and list your place for sale right before Labor Day. Our last two Labor Day weekends have been the kickstart of a very busy few months!

Dennis Cox & Tara Peterson

www.MammothRealtySearch.com

Mammoth Realty Group