PHILLIPS FLASH, DECEMBER 2013

HAVE A GREAT NEW YEAR!

ROLLING TOWARD THE HOLIDAYS

The Snowcreek Athletic Club continues its rehabilitation from a catastrophic water main break last month.  A 4 inch PVC pipe beneath the main building broke in the middle of the night on November 6th, and wasn't discovered until a one million gallon torrent had submerged the first floor beneath 6 to 8 inches of water.

Insult was added to injury when less than two weeks later the repaired main failed again causing another flood and damaging some newly replaced electrical equipment. 

With the leaks finally under control cleanup and repairs have proceeded without interruption. Club representatives now hope to have the facility back in operation by Christmas.

The shutdown has been hard on locals. Until yesterday, favorable warm conditions permitted outdoor pursuits like hiking, cycling and even tennis. But yesterday's cold 6-10 inch snow storm put an end to that party.

Despite improving conditions and massive snow making, the snow pack is still thin, open runs few. Many locals, accustomed to getting their endorphin fix at the Athletic Club while awaiting the next storm, have been forced to buy ice skates or raid the Vons liquor aisles. If these cold dry conditions continue good luck finding a table at a local bar.

MAMMOTH: THIRD QUARTER HOME SALES JUMP 144%!

MCGEE CREEK, OCTOBER 2013

Paced by a ten fold increase in million dollar plus home sales, Mammoth residential real estate skyrocketed in the third quarter of this year. 34 homes changed hands in the period compared with just 19 sold in the third quarter of 2012. Of those 10 were priced over a million dollars while just one million dollar home closed escrow during the same quarter last year. The total value—$29,347,000 in recorded deeds was 144% greater than last year's third quarter total ($12,037,000). And in the million dollar segment 50% were cash transactions.

The condo market improved but not as explosively. The number of units climbed 22% to 88 units sold while total valuation spiked 37% to $26,519,000. The median condo price bounced up 29% to $275,000.

Another indicator of the real estate market's health was the decline in "distressed sales". REO's and short sales accounted for 40% of last year's third quarter condo sales and 31.5% of sold homes. In the same period this year just 3% of homes and 18% of condo sales were distressed.

Finally, if you're still with me, interest rates have leveled off after climbing sharply a year ago. 30 year fixed rate loans are back to 4.25%.  That's a very attractive rate historically. And it looks even better if you believe inflation is coming.

MAMMOTH REAL ESTATE OVERHEATS? SECOND QUARTER SALES RESULTS

"Housing bubble threat grows," warns Bloomberg. "Surging home sales raise new housing bubble fears," cautions CNN Money. Many real estate markets have become "frothy," the Wall Street Journal's Money Watch site proclaims.

RECENT MAMMOTH HOME SALE, $950,000

Wasn't it just last week clients were asking whether prices had hit bottom. Wasn't it just last year that some were still predicting real estate values would never come back. Frothy? 

Indeed, nearly 20% of homeowners nationwide owe more on their mortgages than their homes are worth. Building permits issued for new home construction, while up steadily since 2009 are less than half what they were in the boom years 2004-2006. The widely followed Case/Schiller index of home values in 20 U.S. cities show prices still 24% below their 2006 peak.

Not much to fear there. What has caught the attention of economic prognosticators is the sudden, often dramatic turnaround in real estate demand in hot markets like California's that is pushing values higher. According to DataQuick, a real estate tracking firm, the median price of homes sold in June rose at the fastest year over year rate on record, a sizzling 28.5%. Further, the sale of million dollar homes in California reached the highest level in five years and, despite exceedingly low mortgage rates, a record number of homes were purchased with cash.

If the historical pattern holds true the "froth" evident in big city and coastal markets in California will soon bubble up in Mammoth. We can feel it. Listing and sales stats for Mammoth paint a picture of this percolating market.

18 homes changed hands last quarter, down 25% from the same period last year. The median sold price actually fell 8% to $604,500. But, only 53 homes are listed. None are bank owned or being sold short and well priced properties are selling quickly often attracting multiple offers.

Condos saw more excitement. Sales were up 74% from last year's second quarter. Although the median sold price dropped to $239,275 from last year's second quarter median of $251,000, a solid number of sales exceeded the properties appraised value or asking price. As a result of this strong demand just 119 condos are on the market. Two are bank owned and 7 are short sales.

Our market is in transition. Interest in Mammoth real estate is building. Look for the heat to grow.

MAMMOTH LAKES: FIRST QUARTER REAL ESTATE SALES

Alright, maybe it's too early to begin celebrating the abrupt end of  real estate's 6 year malaise. Maybe we should put down the noise makers and shed the party hats before we look foolish. Mammoth's first quarter sales look a lot like last year's. 71 condos sold to start this year versus 74 in the first 3 months of 2012--the median sales price lurching ahead a tepid $1,000 to $272,000.

Single family home transactions were no different. 21 sold in quarter one this year equalling last year's 21 first quarter sales. The median price of sold homes in Mammoth Lakes actually slipped $7,000 to $575,000. Bank owned and short sales have accounted for about 38% of sales so far this year compared to 47% of sales in quarter one of 2012.

But don't toss your party favors just yet. There's real encouragement in other numbers. Take average sales prices. The average price of a Mammoth condo sold jumped 11% in quarter one of 2013 to $324,511; the average home price rose 19% to $762,714. And  it took 70 fewer days to sell those homes this year.

There's even more to like on the listing front. A scant 112 condos are on the market in Mammoth today--3 REO's and 6 short sales--and only 40 homes, none of which are bank owned or being sold short. These are anemic numbers representing near term lows. Meanwhile pending sales, a momentum indicator, are strong. 63 condos and 14 homes are under contract.

So, while it may be too early to round up camping gear for the next developer's launch it's not too early to start scouting for a piece of Mammoth to call your own. I think we've seen the bottom and it's behind us.

FOURTH QUARTER AND FULL 2012 SALES RESULTS

Is real estate ready to fly, emerging like some sleep sick cicada from a 5 year nap? All over the country a story is taking shape. Inventories are down and sales are up. Even Miami's condo market, one of the most tortured in the United States, is rising. Camp out vigils at pre-construction sales launches are back.

Conventional wisdom pegs Mammoth market moves at 6 to as many as 12 months behind larger markets like L.A.. As they say, past performance is no guarantee of future results but sometime last summer real estate here began to stir.

In Mammoth 96 condos changed hands in the fourth quarter compared with 84 condos sold in the last 3 months of 2011. The number of REO's and short sales remained fairly constant. In all of 2012, 299 condos were sold, just 10 condos short of 2011's total. The median price inched up a statistically insignificant $2,000 to $244,000.

Single family home sales were more dramatic with the number of homes sold jumping nearly 23% in 2012 and 31.5% in the final quarter over the same periods in 2011. Meanwhile the median price of a home sold in Mammoth climbed nearly 9% last year. More dramatically, in the past 12 months 18 homes over one million dollars found new owners exactly doubling the number of million dollar homes sold in the previous 12 months.

Coupled with declining listing inventories—114 condos, 42 homes—and the fewest sales of homes related to foreclosure nationwide since 2007, the bottom seems to be in the rear view mirror.