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Q: I've heard around town that the real estate market has
been extremely active this spring and that the inventory is low. What
is going on and what do you think is going to happen the rest of the
year?
A: The surge of activity this spring has been as strong as
anyone can remember, even the real old timers in the business. And
inventory is indeed low, but that is typically for this time of year.
There are plenty of interesting dynamics in the marketplace and the
next few months are going to be very telling for where we are
heading. So let's take a look.
The most profound thing for me this past winter has been the
volume of people that I have spoken to, whether in my office or on
the chair lift, that have not been to Mammoth in the past 5 to 7
years. These people are very impressed, almost shocked, at the
developments that have occurred here. Primarily the on-Mountain ski
experience. These are mostly southern Californians who have traveled
(by air) to other, more polished mountain resort communities.
World events and the time and hassle to get through airports brought them to Mammoth
this winter. Combine all of this with affordable ski passes and their interest has been piqued
to become part of it, including owning their own home here, whether it be large or small. Words
like "proximity" and "nesting" have become endearing concepts for Mammoth.
In the past few years we have talked about the influence of
the Village and baby-boomers so much that we almost forgot about
them. The Village construction site becomes more impressive every day
and just wait a year or so when we can go up there and have a
Starbucks coffee and jump on the gondola. And the demographers always
said the real baby-boom rush would begin in 2001-02. Time flies, look
at the calendar. And trust me,they're here. It used to be the buyers
drove in to town in their Explorers, now they come in their
Winnebagos.
Strong real estate activity is not isolated to Mammoth. The
whole state is strong. Economists clearly point out the problem-the
housing industry can't keep up with the demand. California's
population continues to grow and is expected to do so until 2025. And
as it does more and more people are going to seek an easy escape home
located in Mammoth.
Another aspect of Mammoth's market that may start effecting
inventory and values is that many of the people who have purchased
real estate here in the past few years have long term plans for
Mammoth. They simply plan on spending more and more time here-whether
it is part of their retirement scheme, their escape plans, or they
just want to get plenty of days on their cheap ski pass. Many are
seeking "duality"- meaning having a place here and a place in Palm
Springs, Hawaii, Baja, etc.. Regular air service will certainly make
that very attractive. Other buyers are intent upon leaving what
Intrawest refers to as a "legacy" property. This is a property
intended for long term, multi-generational use and part of the family
estate. The bottom line is that there is less speculation in the
market and more "holding", meaning less potential available inventory.
There are other factors working on the local market. Some
buyers are afraid interest rates are going to climb so it makes sense
to get in now. Other market watchers are getting the sense that
affordability is slipping away. Just look at the available inventory
on the low end of each segment the market (condos, homes, lots) and
you can get a strong sense of that. And the absorption of new
listings on the low end has been amazing the past couple of months.
One more factor, the wealthier types that we are seeing so much of
seem reluctant to put their excess cash back into the stock market
but are content to put it in to Mammoth real estate. And oddly
enough, if they don't have to get into an airplane to enjoy it, even
better.
So where do I think we are going for the balance of 2002? In
January I wrote on the office web site that I believed we were on the
verge of a ten to twenty percent bump in values. We are seeing it
right now. Some segments have already moved in that direction and
others are heading there. We are seeing the kind of market activity
like we saw a few years ago when values catapulted, but the values at
that time were still pretty beaten down. But on the other hand values
here are still pretty low compared to other world class mountain
resorts. And isn't that where the powers that be seem to be heading
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