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.

MAMMOTH, 3RD QUARTER REAL ESTATE SALES RESULTS

JUST IN TIME FOR CHRISTMAS

Two things have arrived just in time for Christmas: snow, 131 inches so far according to Mammoth Mountain, and belated third quarter sales results. I must apologize to anyone who hoped for a steady—even weekly—post on this real estate blog. It's not that easy. Life intrudes. The blog gets shoved to the back of the plate like lima beans or brussels-sprouts. The void soon grows into a chasm. Who could blame you for moving on.

Well, I'd promise to do better but all I can offer is to do my best. I'm testing a new hip, two weeks old last Tuesday. And, speaking of early Christmases, I'm heading to Dr. Joel Matta's clinic at St. John's Hospital in Santa Monica next Tuesday for a second hip, the left one. 14 days before the fat man's sleigh is due and I'll already have everything on my list.

Recent real estate news has been mostly upbeat. Median home prices are higher in nearly every major market.  Case-Shiller, keepers of a widely followed index of 20 metropolitan real estate markers, pegs the price "recovery" at a two year high.

Confidence among home builders is at a 6 year peak. Mortgage interest rates are near record lows—conforming 30 year fixed rate loans for primary and second homes are at 3.5% with one point—and credit requirements seem to be easing.

With that backdrop, condo sales in Mammoth slipped to 70 units in the July-September quarter from last year's 80 sold condos. The median price drifted lower to $212,500 from $223,000 in the same period in 2011. Sold homes at 18 were marginally behind last year's 20 third quarter homes sales. But the median home price jumped 21% to $642,500. Equally important, listing inventories have shrunk. Just 142 condos are currently for sale in Mammoth and a scant 44 homes. Please email me for a current list of properties available, dennis@mammothrealtygroup.com.

BANKRUPT--SECOND QUARTER AND FIRST HALF RESULTS

The Town's petition for chapter 9 bankruptcy protection recently seems to have been baked into everyone's thinking for months. There's been nary a blip in the real estate markets. Property listing inventories continue to be below last summer's levels--168 condos and just 63 homes--and sales remain strong.

Home sales in the first six months of the year were up nearly 39% to 43 transactions from 31 homes sold in the first half of 2011. The median price of a home sold eased to $650,000 in the first half of 2012 from a median of $680,000 for homes sold in the same time frame last year. The median price strengthened in the current year's second quarter to $675,500 indicating that values have remained virtually unchanged since last year. Condo sales in the first half were off 13% to 124 units from the 142 sold during the same period last year. The median sold price edged higher by 8%.

Short sales and REO's--bank owned properties--remain significant factors in Mammoth's single family and condominium markets. While making up just 6% of home listings and 11% of listed condos, REO's and short sales comprise nearly 50% of all sales. Never the less, I believe the stream of distressed properties is beginning to slow. This will help firm up values.

MAMMOTH CONDO PRICES JUMP!

The lack of snow didn't keep real estate shoppers from snapping up Mammoth Lakes condos and homes in the first quarter of this election year.

74 condos sold from January through March, off marginally from last year's first quarter sales of 78 condos. Interestingly, the median price jumped almost 21% to $268,750 from the 2011 median of $222,500. Reports have been dribbling in of price gains in better neighborhoods down South. Mammoth is a better neighborhood. Could we have turned the corner. In most cycles there are excesses at both the high and low ends so when the correction comes the first moves are often dramatic.This could be the bounce off the bottom we've long anticipated.

Supporting the notion of a stabilizing, if not recovering market, are the inventory numbers which remain remarkably benign in this dismal snow year. Just 161 condos are listed deep into April, and a paltry 64 homes.

Speaking of homes, sales ballooned to 20 transactions in Mammoth's 2012 first quarter, up nearly 50% from last year's 11 homes sold in the same period. While the median price sagged to $541,250 from 2011's first quarter median of $765,000, the absence of new REO listings could portend better times for Mammoth real estate. Just 2 REO's and 8 Short Sale listed homes, and one REO and 15 Short Sale condo listings muddy the pages of Mammoth's MLS.

Miracle March?

It's snowed on Mammoth Mountain. Since February 12, 27 inches have fallen on the ski slopes. The Mountain is reporting a total recorded snowfall for the season of 134 inches and a base of 3.5-5 feet. By most reports skiing is good.

Rumors of a massive March, a "miracle March" like we had in 1991, have been circulating for weeks. Just 42 inches of snow had dusted the Mountain's slopes until March of '91. Then it started snowing and didn't stop. Nearly 176 inches fell. Another March like that and we'd be close to the 340.5 inch average for the past 41 years--100 inches short of the 440.5 inches the last 10 years have averaged--but we could live with that.

In the last two days storms have deposited another 9 inches on the Mountain and a windy system, hammering the slopes right now, is forecast to bring another 6 inches by Friday.

2011 RECAP: SOMEBODY DO SOMETHING

It was a La Nina kind of year. Turbulent. Unpredictable. Disappointing. Dry. The stock market ended within a few points of where it began. The economy came off life support but stayed in the ICU. The ranks of the unemployed remained alarmingly swollen. In real estate, the pace of foreclosures and short sales continued unabated while values slid further south.

In Mammoth 303 condominiums changed hands. Nearly half of them were distressed sales: auctioned, owned by banks or sold short by lenders. That contrasts with 375 sales, in 2010 in which 38% were distressed. The median price of a condo sold in 2011 was $242,000 off 13.5% from 2010's median of  $280,000.

Home sales remained nearly steady at 70 transactions contrasting with 72 sold in 2010. The median price eased 9.2% to $567,500 from $625,000 in 2010. 29% of home sales were bank owned or short sales in 2011 compared with 39% in  2010.

Downward price pressure is not coming from a bloated inventory. Currently there are just 57 homes and 160 condos listed for sale in Mammoth. Well below historical norms. Rather values are being weighed down by distressed properties hitting the market at clearance prices.

On an upbeat note, the Fed's January 11, Beige Book had an opptimistic report on commercial real estate, leading commentator Phil Davis to exclaim, "It is very possible we are finally seeing a bottom." He went on to say that the "Fed and Administration are now looking to concentrate their firepower on residential real estate." Calling it "the last major drag on the economy."

Interest rates on conforming 30 year fixed rate loans dipped below 4 % last week, to a new 40 year low.

WHITE CHRISTMAS?

Eagle Base

It was a post Thanksgiving storm like the other recent fronts. Dry and cold. Since early October's 18 inch snow Mammoth had accumulated less than a foot. The difference this time was the hostile wind--clocked at over 150 mph on the Mountain-- careening out of the north accelerated by the eggbeater of counter spinning high and a low pressure systems in upper Nevada.

My roof started coming apart at 11:00. An awful hammering above our bedroom like some twilight zone monster chopping through the rafters. I bundled up and circled the house with a flashlight. One of the 24 foot long interlocking steel panels had torn loose at the eve and was clapping against the roof sheeting. I'd thought about tightening the screws this summer, after all it had been 20 years, but never got around to it. Now, I imagined one panel after the other peeling off like a deck of playing cards and tearing through the neighborhood .

Canyon Lodge

I rounded up my wife and we wrastled our 24 foot aluminum extension ladder through the wind and stuck it tentatively in the glacial remnants of our last snow. The ladder swayed in the breeze as we ran it up.

"This is crazy," Barbara said fighting  to keep the ladder from skating off the sloping frozen ground and into our neighbor  Bob's house. Nothing doing anyway. We were one rung short of the roof line. We retreated to the garage and swapped for a shorter ladder.

Things weren't much more secure from the second floor deck as I stood on a high rung and leaned over the roof to replace the loose screws. By tipping the ladder onto one leg and underclinging the front eve I could just reach the last screw with my electric drill. Barbara was whimpering on the snow dusted deck. "This isn't worth dying for." I got in three good screws.

Main Lodge

Back in bed all was quiet at first. I'd get a roofer out in the morning. Then after less than 30 minutes kerwhap, whap. Horrible, metallic, like the Blitz. Sleep was futile. Barb withdrew to a downstairs bedroom. I went out to survey the situation. My 2 inch screws had all pulled and the upwind interlocking seam had lifted, zippering all the way to the ridge. The panel was flapping like an outhouse door. It was only a matter of time before it cut loose.

Here's the thing about metal roofs. The sheets are customized for length and color. A replacement could take weeks to make. I lay awake listening for the inevitable ricochet of my roof panel caroming down the street, resolved to chase after it and drag it back to the garage.

When my neighbor called at 9:00 I'd been asleep for about two hours. The wind had slackened and the panel was still flapping. I called Mike Kenney Roofing. Within 45 minutes Mike's crew, tethered on opposite sides of the roof, had set things to right. Hold the wind, I'll take 40 feet of snow.

Crews at Mammoth Mountain Ski Resort have been furiously making snow over the past weeks. From most reports the skiing is good. Canyon Lodge and Little Eagle are scheduled to be open by December 14th!

MAMMOTH REAL ESTATE: Third Quarter Results

After an early October snow storm Mammoth has been granted a reprieve. An interlude of quiet grace. Gilded low angled light sets the countryside aglow. Temperatures arc into the 70's. Aspens and willows, cottonwoods and birches turn out in luminescent golds and shocking reds.

Fishing, by some accounts, has gone off, like a pre-holiday sale. One local tells of bolting down highway 395 on his lunch break, clomping in waders through a mile of boggy meadow to a Crowley Lake glory hole, making two casts, catching and releasing a 23 inch broad girthed 5 pound rainbow and returning to work without anyone being the wiser.

It's a swell time to be in Mammoth.

It's not a bad time to be looking for real estate either. Mortgage rates hover near 4%. Sellers are eager to move on before the real snow hits, and marked down prices, paced by short sales and REOs, haven't looked this cheap since, well, since 2001. For instance, one lucky Mammoth Realty Group client snapped up an 1849, 4 bedroom/3 bath condo recently for the prehistoric price of $380,000.

80 condos changed hands in the third quarter this year, up 11% from 2010's third quarter. The median price eased 16.6% to $223,000 from the same period in 2010. Bank and developer negotiated transactions accounted for 55% of sales while just 17.5% of the current 215 active condo listings are short sales, auction offerings or bank owned.

20 homes sold in the third quarter, a 150% increase over last year, leaving just 66 homes actively listed. The median price slid 10% to $530,000. REOs and short sales made up 27% of sales and constitute just 10.5% of current single family listings.

If you hurry you may still catch a bit of Mammoth's Fall glory and if your even luckier you might snag a piece of Mammoth real estate. For the latest listings please contact me at: dphillips.dpbp@verizon.net.