|
January 23- As Mammoth moves to the prime time of winter (Martin
Luther King Jr. weekend to Easter) it is pretty obvious that my
observations of 45 days ago are playing out. Tourism levels have to
be near record if not beyond. Local Realtors have been extremely busy
showing property since the beginning of the holidays and now many of
those buyers are coming back in subsequent weekends to make their
selections and make offers. Inventory is dropping and this past
weekend we experienced significant action in the single family home
market, especially those in $500,000 range.
Mammoth is experiencing some other interesting market
activity of note. For the past 45 days there have been numerous
buyers in the marketplace that are making low offers but most are
offering cash transactions and very short escrows. Except in a couple
of rare instances, these types of offers are not even being responded
to. Sellers as a whole have very little sense of urgency. And the
level of visitation to the community and the presence of "big things"
happening are not likely to change this.
What "big things" you ask? Well, some of the marketing gurus
at Intrawest must have convinced the contractors in the Village to
pour concrete all night long because during the holidays and on
recent weekends the construction site has been all lit up and
bustling with activity. Quite a show, and quite a statement for the
visitors. The second story columns of the first building are starting
to appear and as the building masses rise to several stories, the
interest in Mammoth's renaissance will certainly carry further into
the real estate market.
Regular visitors to Mammoth Mountain are raving about the
changes to the old Mid Chalet which is now named McCoy Station. The
building has been completely renovated inside and out with a variety
of dining and entertainment options. No doubt Intrawest and the
Mountain are in the food and beverage business as much as the ski
business. And for a regular skier of Mammoth Mountain for the past 20
years, I can tell you that the impact of cheap season passes has
become a very big thing.
So while some buyers want to play the game of shooting low
offers at sellers, other buyers are "stepping to the plate" with
solid offers and going to escrow, and most are trying to close as
soon as possible so they can enjoy the balance of this excellent ski
season.
The basics of the inventory haven't changed much except that
the below $250,000 condominium market is getting really sparse,
although some attractive buys do exist. The best buys still remain in
the $300-400,000 price range. The new Snowcreek units look better
than ever at this point.
There are very few if any good residential lots remaining under $300,000. This is the market segment that is really
beginning to show the effects of supply and demand. Demand for homes is increasing and the supply just isn't there-and it's
not going to be there. Those buyers realizing the shortage and cost of lots and the excessive time and cost to build are
turning to the existing home market with the "use it now and remodel it later" attitude.
Soon, these types of buyers (baby boomers??) who have price
thresholds are going to have to turn to the $300-500,000 townhome
market, and based on the development plans of Snowcreek (Dempsey
Construction) and Intrawest, their new townhome product will be
beyond that price range. And look for the upcoming subdivision of 114
hillside and view lots in Crowley Lake to be in hot demand simply
because of affordability, let alone livability and quality of life.
Recent land acquisitions (sorry, confidential) in the
periphery of North Village display the commitment by developers to
expand the Village development well beyond the buildings currently
under construction. The Town of Mammoth Lakes and Intrawest, after
years of negotiating, came to terms on a 20 year Development
Agreement last week. The Ski Area has worked diligently and appears
to be prepared to finish construction of the Village Gondola this
summer.
The past 45 days have also made it very clear that world
events have now made Mammoth's "drive-to" and "proximity" attributes
a major asset. Another observation is that more and more Nevada
residents are purchasing in and visiting Mammoth. Economists are
upbeat about the economies of both Southern and Northern California
but are very concerned about an estimated 500,000 new residents per
year and an estimated shortfall of 100,000 housing units per year.
The economists are concerned that the unmet housing demand will
hinder the long-term growth of the state but will keep upward
pressure on housing prices. Certainly, yesterday's front page of the
LA Times Business section verified that.
In the past couple of months I have been ranting around the
office that the Mammoth market was on the verge of a 10 to 20% "bump"
in real estate prices. Despite all of the world events and our
current "recession", the tourism level in Mammoth and the real estate
activity including the level of interest and actual offers made and
sales to escrow, all point to that prediction coming to fruition. In
the meantime, I need to take care of some business.
|
