AIRBNB, VRBO, THE NEW MAMMOTH RENTAL PARADIGM?

Wouldn't it be nice to have a condo in Mammoth. A winter retreat for skiing; and a summer refuge for biking, fishing and hiking.  And wouldn't it be great if other people would help you pay for it.

"Will my rents cover the cost of ownership?" I've heard that a lot selling Mammoth real estate for more than 36 years. Until recently, I was quick to caution that rentals would help defray some of the costs of ownership but would rarely, and only in cash transactions, cover all expenses.

The reason was simple, traditional condo reservation companies charge 35% to over 50% of the gross rental receipts. These charges include towel, linen and maid services, advertising, rental bookings and key pickup. It's easy to see how $24,000 -$50,000 in gross receipts could be whittled down to as little as $12,000 -$25,000 by fees.

With the growth of the internet that calculus has has tipped in condo owners favor.  Popular sites like Airbnb charge owners a modest 6% processing fee. Vacation Rentals By Owner (VRBO) levys a once per year listing fee starting at $349. Renters pay the cleaning and taxes. Local representatives—required by the Town—will shoot photos, post property listings, maintain calendars and troubleshoot problems for as little as 10% of rental revenue.

Today the answer to the rental question is yes, you should be able to cover your expenses, and depending on the size of your mortgage, put  money in your pocket.

Years ago my company did a rental computation and concluded that the average condo owner could expect between 85 and 110 nights of bookings in an average snow year provided owners made their properties available on key holidays. With today's internet marketing sites, and with owners committed to maximizing their properties rental potential, both rental nights and rental revenue have climbed.

MAMMOTH REAL ESTATE SALES, FIRST QUARTER RESULTS

It's snowing. Lumpy grapple. Some local forecasters are predicting up to 15 inches of accumulation on the upper reaches of Mammoth Mountain by the end of  Mother's Day weekend. Any new precipitation, any delay in the Spring melt, is welcome.

Mammoth Mountain Ski Area had it's best year in over 4 years in both revenue (details to come) and snowfall (358 inches and counting).  As 2016 began it seemed local real estate markets were responding. Especially the condo market. Inventories were trimmed back from more than 200 listings last summer to just over 150 by New Years Day. There was the giddy sense that, after an unusually long delay, we would follow the big price recoveries in real estate 'down south'.  Like our market (almost) always has. Well, not so fast.

Here are the numbers: 67 condos sold in the 2016 first quarter, compared with 66 during the same period in 2015. While the median price nudged up to $300,000 from $294,500 in 2015, the average price dropped 3.47% to $352,314 from $364,558. Condos listed for sale remain at a slim 156.

HOMES                                                     CONDOS

On the residential side, 16 homes sold in the first three months of this year compared with 18 in the first three of last year. The median price slipped 5% to $862,000; the average price declined by 27.5% to $927,285. Just 43 homes are offered for sale in Mammoth, a 4 year low.

Despite the climate change denialists, including one local weatherman, it appears that resort real estate shoppers are hedging their bets. What if Senator Jim Inhoffe is wrong. What if there's more than a snowball's chance that humans are largely responsible for global warming. 

Snow levels will rise and skiing will be affected. Happily Mammoth, with a summit of 11,053', is in the best position of any California ski area to weather that storm.

CHASING GODZILLA'S TAIL

Some people were expecting more. Alright, I was expecting more. Wasn't this supposed to be the biggest El Niño ever. Bigger even than the 1997-98 monster that brought more than 30 inches of rain to California's coast and 451 inches of snow to Mammoth Mountain. Someone at NASA even called the current El Niño a "Godzilla" as it was building back in the fall.

We may not be getting the big dumps that California needs but things could be worse. The Mountain reported 237 inches of snowfall at the Main Lodge through January. That's nearly 140% of average (170.5 inches) for snowfall for that date over the last 43 years. Great start.

Heck, through February the 43 year average snowfall has been just 244 inches and with the storm last week our season total has plumped up to 257 inches. But, February usually sees 73 1/2 inches of snow, it's 55 degrees out and we're looking at clear skies and warm temps for the rest of the month.
Curiously, folks at the National Oceanic and Atmospheric Administration, NOAA, are still predicting normal to above normal precipitation for the rest of the season.

Photo NOAA

Skiing is great and I guess we should be happy for what we've got. It's just,
you don't load up on popcorn to go to the petting zoo.
MARCH 4 UPDATE: A strong weather system is taking aim at the Sierra Nevada this weekend. The Mountain could see as much as 3 feet of snow. Prospects for continued precipitation throughout the week have diminished somewhat in updated forecasts but the situation remains fluid. Stay tuned.