BIG YEAR: 2017 MAMMOTH REAL ESTATE SALES RESULTS

Ten years after the fact it's easy to forget about The Great Recession. The sub prime mortgage crisis that led, in 2008, to the collapse of investment houses, Lehman Brothers and Bear Stearns. The shuttering of banking giants IndyMac, Countrywide, and Washington Mutual and hundreds of smaller banks. The near panic that prompted the Troubled Asset Relief Program and bailouts of financial institutions, the auto industry and insurance companies. The tens of thousands of homes sold in foreclosure. The millions of jobs lost. The slip slide of real estate and the stock market. The Great Recession of 2008 was like being grazed by a gigantic life ending asteroid.

It took 7 years for most of the country's real estate values to fully recover. But in May of 2015 median home prices in the United States topped pre-recession highs. The trend since 2015 has been mostly upward. Some premium markets—including San Francisco/Silicon Valley, and Southern California beach cities—have even entered what some are calling "bubble" territory. 

Mammoth's real estate recovery has been on a much slower trajectory. Property values in Mammoth began to decline after peaking in late 2005. By 2012 most condominiums had lost over 40% of their value.  It wasn't until 2015 that real estate prices showed a clear move upward and not until the Fall of 2016 that listing inventories started to tighten. 

Today there are just 64 condos and 31 homes listed in Mammoth. By contrast during the summer of 2016 condo listings topped 150; homes, topped 80. Now listings are being snapped up faster than they can be replaced.

Strong demand last year pushed condo sales to 386 units—an increase of 30%  over the number of condos sold in 2016.  The median condo price in Mammoth Lakes jumped 17% to $350,000. Single family residential sales, bedeviled by even tighter inventories, climbed 3% from the previous year to 91 homes, while the median home price reached $770,000, a 7% increase from 2016. Although property values have recovered in the last 2 years they are still 20-30% below 2005 peaks.

No single factor is responsible for our real estate market's recovery. Pent up demand; a record breaking, drought breaking winter; the strengthening economy; pure, runaway exhilaration at the prospect of making America truly "great again".  Okay, maybe not that last one.

 The acquisition last July of Mammoth Resorts by KSL Capital Partners and Aspen Skiing Company added another catalyst. Visions of vast inflows of cash, massive capital improvements, and exciting new commercial developments may be premature, but someone saw big value in Mammoth Resorts and parted with a reported $850 million to buy them. 

ASPEN, KSL HOLDINGS COMPLETE MAMMOTH DEAL

Today Aspen Skiing Company and KSL Capital Partners, a private equity firm, announced the completion of the purchase of Mammoth Resorts. Rusty Gregory, CEO of Mammoth Mountain for 21 years and investor in the new company, is stepping aside to become a senior strategic advisor. Mark Brownlie, chief operating officer of Mammoth Resorts will continue as COO and has also been named president.

This transaction along with the completion of the purchase of Intrawest's ski holdings combines 12 ski areas that range from Stratton Mountain in Vermont to Mount Tremblant in Quebec to Steamboat and Winter Park in Colorado to Mammoth and Squaw Valley in California. 

No terms of the Mammoth Resorts deal were disclosed in today's news release.

ASPEN, KSL PARTNERS TO BUY MAMMOTH RESORTS

In a deal that was reportedly negotiated over the course of a year, Aspen Ski Company and KSL Partners, a private equity firm, agreed to acquire Mammoth Resorts for a sum rumored to be worth   $500-$800 billion.  The partnership, in a separate transaction, acquired Intrawest and it's ski resorts for $1.5 billion. The Mammoth purchase, subject to regulatory review, is expected to close in the third quarter of this year and, when completed, will create a consortium of 15 ski resorts.

Rusty Gregory, Mammoth's Chief Executive Officer, addressed a group of about 100 locals on Monday, April 24th to address the ramifications of the deal. He plans to remain CEO at Mammoth for now he said.  But, as a 63 year old divorced man sitting on, potentially millions of dollars, he wants to explore his options.

The most anticipated consequence of the transaction for Mammoth will be an infusion of capital into the Mountain. Over the next 10 years Mammoth plans to invest $100 million in lift and gondola improvements according to Gregory. On top of that many millions will be sought for a new base facility at Eagle Run to replace the existing sprung structure and, for a new Main Lodge and renovated Canyon Lodge.

 Amidst these rosy expectations, some observers have begun to question where the cash will come from. When Starwood Capital bought Mammoth Mountain for $365 million in 2005 it saddled the ski area with debt and an interest burden reported to be over $20 million per year. Having just ponied up at least $2 billion for recent acquisitions, how much borrowing power does Aspen-KSL have?  With 15 resorts crying for attention like baby birds, how likely is it for Mammoth to get the worm?

The effects on real estate so far are hard to sort out. Real estate inventories this winter were already tight. Recently there were only 31 homes and 83 condos listed in Mammoth. Well priced properties coming on market are being snapped up quickly. Sierra Escrow reported opening 100 escrows last month. If inventories continue to be constrained as the ski season winds down—a period of historically expanding listings—then values should rise.

JANUARY BREAKS ALL TIME, SNOWFALL RECORD FOR SINGLE MONTH

A Neighbor's Driveway

So much for not having storms like the old days. Back when we'd get 3, or 4, or even 5 feet in a cycle. Looking for winter's Noah now.  Looking for Snoah.

All the roof shovelers are driving new pickups and popping into real estate offices. While the contract snow services that get a fixed amount at the beginning of the year for a season's snow removal, are queued up for small business loans. Too many 13 hour days that start at 3:00 am. Too many days in a row. Payrolls looking like a small country's.

January just kept ripping. 245.5 inches of snowfall at the Main Lodge. That doesn't account for the precip that fell as rain. Water content of the snow pack in our section of the Sierras is running close to 200% of normal for this time of the year. 82 more inches have fallen so far in February bringing the season total at the Main Lodge to 432". The forty year season average through  2010-11 was 343 inches.

The comedians at the Weather Channel are predicting another snowy week ahead. Still, there have been breaks. The Mountain is in fabulous shape and the Town has gotten cleaned up.  Plan a trip. This winter is not to be missed.