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As appeared in the Mammoth Real Estate Times, Fall 2001 edition.
Q: I see that construction of homes (residences), especially
ones that are getting bigger and bigger, has really taken off in
Mammoth and new homes offered for sale seem to get more expensive all
of the time. Seems like there might be a bubble about to burst. What
do you think?
A: While this segment of the market might not be as outwardly
impressive as what is going on in the Village, as I drive around the
"backstreets" of Mammoth, which I do almost every day, the level of
construction in the residential neighborhoods is very
impressive-almost staggering.
The basic homes being built are large and very livable. They
often push the building restrictions of the Town to the limit. The
even larger, very custom homes are being built on the higher-end
subdivision lots and some of the more uniquely located lots in
Mammoth. These homes are taking at least two years to construct and
finish. Most of them are simply awesome mountain homes.
So let's look at the market dynamics and see if there is a
bubble about to burst. There is clearly scarcity of buildable lots.
It is always interesting to talk to relative newcomers to the area
and explain that we just can't plow out another 40 acres on the side
of town and start building homes. After the completion of the new
Grayhawk subdivision and a new, small section of lots being released
by Intrawest on the Sierra Star golf course, the availability of
privately owned land zoned for or even probable for single family
development goes to zero. Between the myriad of environmental groups
and the Forest Service bureaucracy, don't bet on any more becoming
available.
The number of unimproved residential lots dwindles every year
and several high-end homeowners are buying up the lot or lots around
them to preserve their open space. We are seeing more and more older
homes in choice locations going through major, if not complete
remodels. This trend should continue because many existing homes are
relative good buys, especially if you consider the wait-time for a
new one.
And where will the demand for these homes go? According to
the most famous "baby boomer" demographer Harry S. Dent, the demand
kicks around 2001-2002. So we're just starting. Recent world events
have accelerated this migratory shift to perceived "safe havens."
Even the Wall St. Journal has recently written a feature article
about it. It certainly doesn't appear that the demand will lessen.
Quite frankly, living in Mammoth is looking better and better all of
the time.
As this demand grows, there are certain to many who will
become priced-out of affording a free-standing home. The good news is
the large amount of quality townhomes (in condominium projects) that
are quite livable because of their size, storage, washer /dryer,
etc.. Interestingly enough, this segment of the market has been
softer than the others. For older or busy(lifestyle) owners who don't
want the responsibility of maintenance, these properties are
excellent. Everything on the outside, including snow removal, is
taken care of and there is less to keep clean on the inside. They
also have what I call the "walk away amenity." A big series of
winter storms coming? Just pack up the SUV and head south.
There are other affordable alternatives for those who want
their own home. The Crowley Lake to Big Pine corridor offers some
very nice properties with more affordability and less severe weather
than Mammoth. But scarcity is a big issue there too and demand has
grown substantially in the past couple of years.
So is this a bubble about to burst? It certainly doesn't
appear to be heading in that direction. The owners of these
properties are for the most part a very financially sound group and
they truly desire to spend more and more time in their Mammoth homes.
And an increasing number desire to make Mammoth their permanent home
in the future. And just wait until there is regular air service, then
the demand could go even higher.
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