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February 23–The activity over the past President's weekend holiday displayed a high level of interest in Mammoth real estate. But the lack of really quality inventory is keeping many of those prospective buyers from becoming real buyers. The good, available inventory has been picked through and acquired by prudent buyers in the past two months and the new quality listings don't last long on the market.
What's driving the market? The current marketing and pre-sale efforts for the Westin property certainly has helped get the market buzzing. History has shown that when Intrawest cranks up their marketing machine for a new property release, overall interest in the market increases right along with it. The Westin name, and the services that will come along with it, on the newest condo-hotel offering in the Village is gathering lots of attention. The first sales event is scheduled for April 9 (Phase I, 141 suites). There will probably be a billion reservations by that time, with strong interest coming from existing Intrawest owners, buyers attracted by the promise of better services in a new Intrawest project, and plenty of speculators.
Prices should be close to and beyond $1,000 per square foot, depending on the location and view. One of the real pluses of the development is that the building will have true ventilation and air conditioning, a Westin requirement, and something all the previous Intrawest built condo-hotel product sorely misses. Most of the units offered are studios (76) with one-bedroom (41) and two-bedroom (24) units thrown in. We can only anticipate that monthly maintenance fees will be outrageous to insure the level of quality and service Westin demands, but that should be offset by rental demand and prices. This should become the hot place to stay in the Village.
Figure about three years to get the property completed. Most agents in town are recommending to prospective buyers who don't already own a property here in Mammoth to purchase something else in the meantime and ultimately do a 1031 tax-deferred exchange into the property when the time comes to close. Ultimately, the confidence of Westin coming to Mammoth only means that Four Seasons and Ritz-Carlton aren't too far behind. And that confidence only builds buyer confidence in the overall market.
What else is driving the market? Continued low interest rates aren't hurting it. And great snow conditions will help as we push through the late winter and early spring selling season. We've had lots of visitors from Whistler the last couple of months because of marginal snow conditions there and excellent conditions here.
The marketing push of Mammoth's new fractional projects (Tallus and 80/50) is drawing attention too, but the real interest level in fractionals is hard for this broker to measure. The concept is new to Mammoth. And the Southern California clientele who drive this market haven't yet fully embraced the concept. I emphasize yet. Fractional ownership is the hottest thing in the resort industry.
How popular fractional ownership will become in Mammoth, due to the nature of this resort, is yet to be seen (this will be the topic of an in-depth column in the near future.) There appears to be some speculators in the fractional market, putting their money down on reservations. But like the Westin, buyers have to be wary of the fees that will go along with all of the promised service. The cost of doing business is only increasing and the workforce is limited. Regardless, the fractional developers will continue with expensive marketing efforts, which create interest and excitement.
What's been hot in the market? Based on the demographics of the marketplace, it is no surprise that the answer is quality properties in quality locations. The best-of-the-condos, homes, and lots inventory has been picked-off by the savvy early winter buyers. What's not selling? The dated, (and now) overpriced 70's built condominiums and homes in lack-luster locations. Sellers in this segment of the market are not seeing the values of a year ago. Today's market simply won't support them. The ever-increasing need for capital improvements in these properties (and the subsequently higher costs of ownership) should continue to impact their immediate appreciation.
The more important trend appears to be that today's buyer in Mammoth is more discerning–concerned more about location and the quality of the property, and rightfully so. Price or price range is not the issue. The rush of just buying anything is long gone. In my book, that's even more reason why buyers need to work with more experienced and discerning brokers.
One surprise; the focus on the Village has cooled and the Intrawest properties around Chair 15/Eagle Base have sold well. Some consumers and investors are leaning back towards the true ski-in and ski-out properties with less congestion. And they're willing to wait for the Mountain to figure out when and what is going to be built at the base and parking lot. Juniper Springs has started a program to offer their owners interior upgrade packages. Those improvements will be ultimately promoted to the nightly guests. Personally, as an owner in this neighborhood, I can tell you that the recent management changes at Juniper Springs are a very positive direction.
Real estate consumers are being bombarded with new projects in Mammoth. The problem is that it is taking so long for these projects to be completed. Today's buyers want to use their properties now. And they don't have the vision to see what these new projects are really going to afford, no matter how much the developer tries to paint the picture. It appears that quality existing properties are only going to continue to appreciate.
Meanwhile, the airport issues become more convoluted every day. But don't be surprised to see air service in the near future. And private aircraft usage of the airport continues to escalate. There is so much (deed restricted) affordable and employee housing under construction that it just might be possible for service levels in town to catch up. There is growing support (Advocates for Mammoth) for curtailing some of the development in town. As a former planning commissioner, I'm in agreement that the pendulum has swung a little too far and is in need of some balance.
One thing to note; the Mountain is changing some of the Value Pass structure. If you are, or ever intend to be a Value Pass holder, you better check out the Mountain's web site for the latest details. You don't want to miss out. The late winter and spring should be great for skiing and real estate
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