When we get the inevitable question of “how’s the market up here?”, we have been telling our clients that we are still below the peak from ten years ago, unlike the rest of California! Most of southern California is well above the the peak from ten years ago. So is it a good deal to buy in Mammoth right now? Since Mammoth’s real estate market has typically followed SoCal’s market, then possibly it is.
Just how much below our peak are we? Here is the price per square foot data from 4,398 condo sales from 2004 to late July 2017 (there were more sales, but a few did not have $/sqft data):
There was some frothiness in our market ten years ago when financing was easy and when buyers believed that condos built by Intrawest (i.e. Village, Westin, Juniper Springs Lodge, etc.) would be a great investment (in terms of appreciation) and generate good rental income. The latter was true, especially in the good snow years, but then the bottom fell out of our market, like everyone else’s during the Great Recession.
The drop in the red line of the graph went from $915/sqft to $369/sqft in 2012, a 60% drop. The current level of $494/sqft is still 46% below the peak. Not that we are expect to hit that same peak soon, mainly because financing got really tough for these ‘condo-hotels’ (where a lot of foreclosures happened in 2009).
The blue line for the Non-Intrawest condos (i.e. Snowcreek, SeasonsIV, Summit, and everything else), shows the drop going from $520/sqft to $231/sqft, a 56% drop. These condos are generally older than Intrawest condos and located further away from the slopes, which explains the consistent value gap below Intrawest condos. These are still 41% below their peak.
So basically, the story from the last ten years is that we peaked (like the rest of the state) in 2007, then dropped like a bomb to 2009, kept going down until hitting rock bottom in 2012, jumped up a bit in 2013, then flattened out during our drought years, and now are going up again in 2017.
We had a great snow year (too great? asks some locals with chimneys that were chopped off by snow sheds), which always helps. And the announcement in mid April that Aspen Resorts is attempting to purchase Mammoth Resort helped boost things recently and we are having a strong summer selling season.
How much further will we go? Will SoCal reaching new heights, some buyers are looking for bargains elsewhere. We recently sold a townhome to a couple buying their first home; they could only afford to rent in Manhattan Beach so they bought their first ‘home’ in Mammoth! And those folks who have made great gains over the last 5 years are selling their investment properties in L.A. and deferring their capital gains taxes by buying a like-kind property in Mammoth with 1031 Exchanges. So the demand is still strong and our inventory is lower than average, so this should lead to more price gains.