Category Archives: Real Estate Blog

The Perfect Storm: KSL + Snow + Airbnb

The Perfect Real Estate Storm: KSL + Snow + AirBnB

While we wait for the perfect winter storm to kick-start our ‘17/’18 ski season, the Mammoth real estate condo market is in the midst of a wild rise in prices.  The average $/sqft for non-Intrawest 1-bedroom condos has shot up 44.1% from Q2 to Q4 (thru Dec 3).  (Intrawest condos like The Village, Westin, and JSL were excluded because they tend to skew the data higher and not enough were sold to make it relevant).

One stark example comes from The Summit condos near Eagle Lodge.  See the chart below for sale prices of 1-bedroom condos in 2017.  There was some variance in the condition and location of each condo, but the variances were not enough to explain the overall 64% jump $200k to $328k.

Chart - Summit 1beds 2017

Why is this happening?

It started back in mid-April 2017 when KSL Capital, a partnership related to Aspen Resort, announced its purchase of Mammoth Mountain Resorts (which includes June, Big Bear and Snow Summit).  Being brought in with other resorts like Squaw and Deer Valley created speculation that maybe our ‘temporary’ white tent at Eagle Lodge will finally be developed into a proper lodge, along with other investment.

This, after Mammoth was emerging out of an Epic Winter that dropped over 20 feet of snow in the month of January alone.  (We just sold a condo that still has damage from that perfect storm; contractors have been in very short supply to repair all the damage.)  Folks around town are hoping for a more ‘normal’ winter this year; was it a case of too much of a good thing?  A quick drive around town revealed collapsed decks, lopped-off chimneys, and scrunched cars.  Despite the snow’s effect on structures and our shoveling muscles, Mammoth Mountain had great visitation and condo rentals were very strong.  Transient Occupancy Tax (the town tax that is collected on all nightly rentals) had 6 consecutive record-breaking months from Dec-May!

The AirBnB Effect: Because of the higher rental income noted above, more buyers want to get in on the AirBnB phenomenon.  They first hear about the commission rates that large rental companies in Mammoth charge (40-45% for most, up to 60% at The Westin) and realize, hey I can cut out this huge middleman and manage rentals myself from my phone. It is not quite as easy as that, but many buyers already have experience with AirBnB elsewhere and want to expand their portfolio.  Many are trying for their first time and therefore want something small that is manageable, thus the run on 1-bedroom condos mentioned earlier.

Perfect Storm: This trifecta of factors, in our opinion, have drastically increased interest in small condos in Mammoth.  Through Dec 4th of 2017, there have been 378 condo sales compared to 303 sales in all of last year.  Condos started selling more quickly last spring, creating a dearth of inventory (we are at our lowest inventory level in 14 years!), leading to multiple offers and a rise in prices.

Labor Day often marks the start of a mini buying spree as buyers want to get their rental set up before Thanksgiving.  This year was tougher because of limited options on the market, so many agents took to trying to find off-market listings and buyers were willing to pay over the asking price.  While low interest rates also helped some, it is still hard to beat an all-cash offer with no appraisal or loan contingencies.

Lately, however, we are feeling some resistance to some of the higher list prices that sellers are throwing out there to see what sticks.  A standard 2-bedroom condo at Sunstone was just listed for $575,000 when the last sale was for $425,000 last April.  This 36% jump hearkens back to the days leading up to the last market peak (i.e. 2004-ish), but our prices are still below the last peak (i.e. when someone paid $710,000 for a 2-bd Sunstone!).

Rising prices typically convince would-be sellers to wait a bit longer before selling, which further contributes to our low inventory and exacerbates the supply/demand balance.  If you are considering selling or buying soon, keep in close contact with us for updates and new listings.  -Dennis, Tara & Eric

New Businesses to Keep Eye Out For

New Mammoth Lakes Businesses to keep an eye out for:

* Shelter Distillery – Locals and visitors alike are anxiously anticipating the opening of this first distillery in Mammoth!  Shelter Distillery is located in The Village at Mammoth, adjacent to Gomez’s restaurant.  The distilling began a couple of months ago and the grand opening is slated some time in December (hopefully mid December!).  They will be offering food as well and we’re looking forward to seeing what kind of tasty offerings they will have!  Owners Matt and Gracie Hammer also own Black Velvet Coffee (located in the outlet mall on Main Street) and we’ve already seen the quality of what they offer in the way of coffee so are super excited to see what they are going to offer in the way of spirits!

* The new Bleu – You may have already partaken in the goodies at Bleu (charcuterie, cheeses, freshly baked breads, wine, beer, etc.), currently located right next door to Base Camp Cafe on Main Street.  However, the owners, Theresa and Brandon Brocia, are opening an expanded version of their existing shop in a new location off of Old Mammoth Road in the old ChartHouse building (across from Good Life Cafe and Nik N Willies).  Their expanded offerings will include meals to go (Lunch and Dinner boxes and “Event-Ready” platters) and a lounge that will seat up to 50 people.  Keep an eye out for the opening of the new Bleu hopefully in February sometime!

* Grocery Outlet – You may have already noticed the construction along Old Mammoth Road (across from Rite Aid and the DIY center) and wondered what is coming.  This is the location of what will essentially be Mammoth’s 4th grocery store.  Currently, we have Vons, Sierra Sundance Whole Foods, and Busy Beez General Store.  The new Grocery Outlet is proposed to be approximately 20,000 square feet in size.  No dates set yet for a tentative opening.

House-Hunting the Virtual Reality Way

What if you could start your Mammoth house hunting from anywhere in the world?  Well, now you can with our new Virtual Reality / 360° video house-hunting program.

Before you arrive in Mammoth, we can set up your own personal portal for viewing VR/360 videos of the properties you and your agent have preselected from the MLS.

The videos are organic and are narrated by one of us who is on site telling you about all the features (and sometimes, smells!) of the property. This video experience is a full immersion into the property from top to bottom.

You will be able to decide if the property is one you would like to see in person on your next visit to Mammoth.  This will allow you to enjoy more of your vacation time with family and friends on the slopes and not waste time on properties that are not what you are looking for.

In addition, on busy weekends when many properties are rented and unavailable to see, you still can view them on your private portal on your phone or computer while you are enjoying your stay in Mammoth.

Email our team member, Eric, to learn more or get set up with a free portal.

Prices in Mammoth over last 13 Years

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):

Pricepersqft Condos graph Jul 2017

 

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.

Aspen partnership to acquire Mammoth Resorts

Big news in Mammoth today!

Word just came out this morning that Aspen Skiing Company and KSL Capital Partners, LLC, are purchasing Mammoth Resorts for an undisclosed amount.  Click Here to view an article from the Denver Post.  This has definitely created a buzz here in Mammoth (and outside of Mammoth).

What will this mean for the MVP season pass and for overall pricing for resort products?  what will it do for the Mammoth Mountain Ski Area brand?  We remember the disappointing feeling that Mammoth was getting ‘corporatized’ when Starwood Capital bought MMSA from Intrawest and Dave McCoy in 2005.  But they seemed to be able to keep the boutique feel of an independent ski resort (mainly by keeping key people in place, the veteran employees who have been here over 30 years), but also innovate and improve operations and marketing.  And when Mammoth (with June) bought Big Bear and Snow Summit, it seemed like a logical next move.  Does this now seem like the next logical move, to be acquired by Aspen?  Rusty Gregory, CEO of MMSA seems to think so, according to his resort’s press release this morning.  But he also states that Mammoth will “continue to operate on a standalone basis but coordinate closely with our new partner resorts.”  Rusty also disclosed that he will continue to own part of thew new company.

We have experienced (and are continuing to experience) an amazing winter here in Mammoth and, given this news, it should be an interesting spring for our real estate market.  With an already low inventory and healthy demand, there may be more confidence among buyers that a name like Aspen will just add more stability to operating a world class ski resort, restaurants, mountain bike park and partnerships with our local airport.  We would also anticipate that with new ownership we may see new capital improvements on Mammoth Mountain that have been put on hold for years.  Stay tuned.  Your comments are welcome!

-Tara P. & Dennis C.

Inventory Plummets as Mammoth Mtn gets ready for Opening Day!

Wow!!…As of today (11/8), we only have 108 condos listed for sale here in Mammoth!  This is the lowest that this number has been in 2 1/2 years.  As mentioned in our last newsletter, it is typical for the inventory to drop this time of year.  It is a combination of (1) buyers purchasing places before the ski season and holidays, and (2) sellers pulling their condos off the market to use them for one more season (or rent them).  But this number is LOW!  Should be an interesting winter in the real estate market here in Mammoth.

Opening Day for Mammoth Mountain is just TWO days away!!!  I was up at Main Lodge late yesterday and the Mountain is looking majestic.  If you like to ski the top, it looks like there’s some decent snow up there, especially for this time of year.  They are planning on running Chair 1, Chair 3, both upper and lower gondolas and are expecting to open Broadway, Saddle Bowl, Center Bowl, West Bowl, Dave’s Run, Climax and Cornice.  Here is a photo from Instagram posted by Mammoth Mountain showing the back side of Chair 3…looks inviting!  Can’t wait to get out there and make some turns later this week!

backside-of-chair-3

– By Tara Peterson

Contracting

Looking for Contracting work? Here are a few helpful tips:

Do you want to remodel your kitchen, or maybe upgrade your bathroom? Well, it’s quite possible that you are in need of a Licensed Contractor. By California’s definition, a contractor is someone who does over $500 in labor and material improvements to your property.

What does it take to become a Licensed Contractor? Licensees must pass a state exam, carry a $15,000 bond, have four years of experience/ supervised work, and meet other requirements to acquire a license. Licensees must not only prove that they know their specific contracting skill(s) but also know contracting law. You can look up a licensee Here using their license # to see if any complaints have been filed and other info about their license.

There are 44 different contracting specialties from a General Contractor to a Solar Contractor. To see all the types of contractors Click Here. A general contractor is one who practices multiple skills and must use at least 2 unrelated skills on a job where a specialty contractor can focus on their expertise.

Looking to be an owner-builder? It is important to understand the risks involved. You need to know how to pull building permits, understand your responsibilities, and ultimately realize that the integrity of your project lies with you. Click Here to view more tips and warning for owner-builders. Also, the town of Mammoth requires you sign a Owner-Builder Declaration to ensure you assume the responsibilities.

Using a licensed contractor protects you against fraud, faulty construction, and protection if you are unsatisfied with the work. Also, if people are on your property who is liable if an injury occurs? It is up to the property owner to hire someone who they can hold accountable. To view other benefits of hiring a contractor visit http://www.cslb.ca.gov/.

California law states that property managers (i.e. for Mammoth condo complexes) are required to have a license if they are doing jobs over $500, even if it is just routine maintenance. Also, the closest enforcement agency is in Fresno. They rarely visit Mammoth to check out work sites. However, the best protection as a property owner is to look up a contractor yourself Here.

**Most of this information applies to both general and specialty contractors.

— Joel Turner

Vacasa

The New Kid In Town

Vacasa Vacation Rental Management

There are several very good local rental management companies to choose from, like Mammoth Rental by Owner, Mammoth Reservations, (and more here: www.MammothLakesResources.com).  Vacasa, with nine properties under management so far, is among the newest.

Vacasa provides the returns of listing your property on a site like VRBO.com or Airbnb.com, but with none of the hassle. They are a full service company that takes care of everything from bookings and housekeeping to making sure the propane tank on your BBQ remains filled.

What really sets Vacasa apart from other local property management companies is their financial guarantee.

“If another vacation rental firm currently manages your home, we guarantee that you will earn more during your first year with Vacasa. If you currently manage your home by yourself, we guarantee that you will earn at least as much with Vacasa managing your home, even after our management fee. If not, we will refund the difference, up to the full amount of our management fee”

A company that is so confident they can beat the competition that they will refund the difference if they don’t? I wanted to know how they could make such a claim. I spoke with local Vacasa Manager Emma Romo Haisten about it. She explained to me that Vacasa is able to beat the returns of other companies by utilizing new technology. They have an advanced algorithm and a ‘rates analysis team’ that help set the prices for each rental each night. This helps owners earn more by keeping their rental booked more often at the appropriate rate, similar to how a hotel room or an airline flight is booked. Prices rise or drop with demand.

Even though it is an international company that has won awards from the BBB, Vacasa hires a local team in each city it is in. They have a local manager, reservationist, handymen, and housekeepers. They say on their website, “We hire the best housekeepers in each destination, and we retain them by offering a year-round living wage and plenty of advancement opportunities in an industry known for its seasonal fluctuations.”

They also post all of their listings on VRBO.com as well as their own site, to attract new guests that may not have heard of Vacasa yet. Another neat feature- even if you don’t own property yet, you can request an income projection for the unit you’re interested in to give you an idea for how much money you could make by renting the property through Vacasa. Property management, welcome to the 21st century!

We here at The Dennis Cox + Tara Peterson Group are interested to see how Vacasa does in our local market. Right now they are only managing nine rentals in Mammoth and are working to build their team. How will they stack up against the well-established property management companies in our area?  Would you be willing to try a company that is new to our area?

Interested in learning more? You can check out vacasa.com or contact Emma directly at Emma.Haisten@vacasa.com

And check out their article in Forbes at: http://www.forbes.com/sites/brucerogers/2016/04/08/eric-breon-builds-vacasa-vacation-rental-service-into-high-growth-business/#1121a6776622
By Shelby Pracht

NEW WATER-CONSERVING FIXTURE LAW

NEW LAW AFFECTING ALL CALIF. HOMEOWNERS AS OF 1/1/2017

Requires Water-Conserving Plumbing Fixtures

 

There is a new law rushing at us that takes effect January 1, 2017 which requires all homeowners in California to have water conserving plumbing fixtures.  Did you catch that?  All homeowners.  Not just when you sell your home (i.e. “point of sale”), but simply if you own property as of 1/1/17.

If you own a single family residence in CA as of Jan 1st, you will be outside of the law if you have any of these non-compliant plumbing fixtures:

  • Any toilet manufactured to use more than 1.6 gallons of water per flush.
  • Any urinal manufactured to use more than one gallon of water per flush.
  • Any showerhead manufactured to have a flow capacity of more than 2.5 gallons of water per minute.
  • Any interior faucet that emits more than 2.2 gallons of water per minute.

Once I heard this, I rushed to my toilets and saw that they all use 1.6 gallons per flush…phew.  And I don’t know how many homes have urinals, but I have yet to hold a bucket under my showerhead with a stopwatch to calculate the gpm.

However, if you own a home that was built after 1/1/1992, your toilets are probably okay since California has required low-flow toilets for new construction since this date.  And the law actually only applies to homes built before 1/1/1994, so homes that are less than 23 years old are okay!

And get this…condos are exempt!  The law reads “single family residential property” and condominiums are not SFR’s!  Will the law be expanded to include condos?  I predict that they will.  In Mammoth Lakes, I count about 4,540 condominium units built before 1992…that’s a lot of toilets.  As an aside, the law states that multifamily and commercial properties do not need to comply until 1/1/19.

Policing: How will this law be policed?  I find it hard to believe that a state agency will be going door to door to measure your fixture flow rates.  Real Estate law currently requires that when you sell your home, you must disclose the presence of any water conserving plumbing fixtures.  (Realtors love it when they do this…effectively making us the police.)  The Real Estate Transfer Disclosure Statement form (“TDS”), which all sellers must fill out and provide to buyers during escrow, currently has a box to check if you have “Water-Conserving Plumbing Fixtures.”

An attorney from the California Association of Realtors believes that the Seller Property Questionnaire (SPQ) form will be revised by the end of 2016 to include a question that may be stated this way: “Are you (Seller) aware of any noncompliant plumbing fixtures?”  And if a Seller checks “Yes,” they are required to explain further.  So, if you remodeled a few of your bathrooms but still have one old bathroom with a high-flow toilet, you must disclose that it is non-compliant.

Then what?  Is the Seller required to upgrade the fixture(s) before the close of escrow?  Not necessarily.  The TDS pg 2 says, “Installation of a listed appliance, device, or amenity is not a precondition of sale or transfer of the dwelling.”  So, it will probably be left up to the Buyer and Seller to negotiate this.  If it is realized early, it can be built into the list price and disclosed in the listing that “Buyer shall be responsible for compliance with water-conserving plumbing fixture state law.”  Or, it could be asked for by Buyers after the home inspection – which brings up the question about how or even if home inspectors will test these fixtures.

The current corollary to this law is the requirement for all property owners to have carbon monoxide detectors in their dwelling.  If a property does not have them, Buyers or their lenders will often request that the Seller install them before close of escrow.  Sellers do not usually mind because these devices are not too expensive (sometimes we agents end up taking care of it out of our pockets).

If Buyers do ask for Seller to bring noncompliant fixtures into compliance before close of escrow, this is a much bigger ticket item, and even if a Seller did agree, the Seller will most likely install the cheapest fixtures available.  I predict that Buyers are going to ask for a credit so that they can upgrade the appliance to their liking after the close of escrow (and many Buyers may just pocket the money and not even make the modifications).

I called the Mammoth Community Water District to ask about enforcement and they do not currently have an enforcement program in place, nor do they know if they will even be responsible for enforcement.  They have called both the state and the Town of Mammoth Lakes but have not gotten any concrete info.  Sounds like this law is not on many people’s radar yet.

However, the MCWD does have a generous rebate program in place to help incentivize us to upgrade our toilets and showerheads (http://www.mcwd.dst.ca.us/rebates.html).

Other resources:

So for now, just be aware this law is coming at us quickly, but is not clear how it will be enforced.  It will be interesting to see how the real estate market reacts/adjusts to the latest ordinance affecting our largest asset(s).

– By Dennis Cox

Coffee in Mammoth

Where to Cozy Up with the Best Coffee this Fall

“Why yes, I’ll take the pumpkin spice everything, thank you.”

sawada-coffee-image-for-blog

Cool Temps and Warm Coffee

Fall is a beautiful time in the Eastern Sierra. The temperatures are dropping, the leaves are changing, and it just smells like autumn. Nothing can rival the fall color hikes and drives that the Eastside has to offer this time of year. Except maybe snuggling up with a warm cup of coffee afterward.

Drink Local

While I enjoy a pumpkin spice latte from Starbucks as much as the next guy, taking the time to seek out some local brews will be well worth your time. All coffee shops offer hi-speed wi-fi, so you can get some work done or lazily browse through some real estate listings! If your style is…..

Modern Industrial Chic

Check out the newest local coffee shop, Black Velvet Coffee. It’s located in the Mammoth Luxury outlets and they roast their own beans (which you can purchase to take home!) They also do wine tastings, and serve waffles. Yes, waffles; little scrumptious waffles that make the whole place smell delicious. The exposed metal and concrete design makes the place feel very hip and fun.

 

Eclectic and Colorful

Stellar Brew is for you. The bright blue building on Main St. is hard to miss. Now is the perfect time to sit out on their patio and enjoy the sunshine. The local artwork and jewelry displayed are not the only reason that Stellar Brew is the favorite hangout for local hikers and climbers- they offer an incredible array of breakfast and lunch options on top of the delicious drinks and smoothies. Their baked goods rival the best in town (the cinnamon rolls are to die for) and they offer lots of options for those with food allergies and sensitivities. Don’t miss their pumpkin pie chai this time of year!

 

Classic and Cozy

Looney Bean is always a good bet. With a location in Mammoth and in Bishop, you can’t go wrong snuggling up by the fireplace and feeling the Looney Love. Looney Bean also roasts their own coffee and the company has been around making friends in the coffee world since 1992. Worked up a sweat on your hike? Go with their cold brew coffee. Believe me, your taste buds will thank you.

Don’t worry if you are a creature of habit, Mammoth has two Starbucks locations (In the Village at Mammoth and the Minaret Mall next to Vons) where you can grab your usual. Cheers to leaf-peeping and delicious coffee – and keep an eye out for me snuggled in the corner with a book and a latte!

-Shelby Pracht