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

Mammoth Lakes foreclosure inventory update

REO listings at lowest level since 2009

We have recently seen a lull in the number of foreclosure (REO) listings in Mammoth and Mono County. In most of 2009 and half of 2010, the inventory stayed below 10. Then, we hit peak inventory in the spring of 2011 at 16.

After this peak, REO inventory has steadily declined to where it is today, at only 2 bank-owned condos on the market.

Is the end in sight? Are we done with foreclosures?

Inman News reports, "The improving job market and economy is helping push mortgage delinquencies and foreclosure starts down, but the percentage of loans in the foreclosure process remains stubbornly high, especially in states most affected by robo-signing issues. ... In "judicial foreclosure" states where courts handle most foreclosures, 6.8 percent of mortgages were in foreclosure at the end of 2011. In "nonjudicial" foreclosure states where most foreclosures are processed outside of the court system, loan servicers are clearing the backlog more quickly, and 2.8 percent of mortgages were in foreclosure.

Five states accounted for more than half of all loans in foreclosure -- Florida, California, Illinois, New York and New Jersey. All but California are judicial foreclosure states."

The reasons for REO backlogs may be different in Mono county. According to our local title company report, there are still just as many homeowners behind on their payments. But more often these homeowners are able to successfully negotiate a loan modification and keep their property or they are declaring bankruptcy, both of which prevents the property from going the way of the REO. In addition, more properties are being sold as short sales, which also prevents foreclosure.

While the REO inventory during the past 3 years fluctuated between 2-8% of the entire condo inventory on the market, REO's have accounted for a higher percentage of all condo sales.

In 2009, REO sales were 17% of all sales. In 2010, that number grew slightly to 18% and then peaked in 2011 at 27%. So far in 2012, REO sales are only 14% of all sales (mostly due to the limited inventory.)

Because their pricing has been so attractive, many buyers have snapped up these types of properties. I feel that sometimes it is just the label of 'foreclosure' that creates a perception that the condo is going to be a great deal. It gets buyers' attention and many times ends up creating a bidding war. REO's have sold at 91% of their original asking price vs. 88% for regular sales but have much faster with an average days on market of 78 days vs. 163 days for regular sales.

You can always go to www.MammothLakesForeclosures.com to see the latest foreclosures on our market (including homes and vacant lots and in areas from Bishop to Bridgeport) and see if our inventory says low or rises in the next few months. -Dennis Cox & Tara Peterson