[Originally posted May 2, 2013]
The real estate market in Mammoth Lakes has turned. A few of our buyers have been beat out by other bidders in multiple-offer situations recently. And some have had to come up in price over what they originally planned to pay. It definitely feels like a shift from a buyer’s market to a seller’s market.
One way this has become apparent is in the sales-to-list price ratio. This is the percentage of the final sales price divided by the latest list price of the property.
In the Mammoth condominium market since last summer, the sales-to-list price ratio went from 95% to 97% to 96% and is currently at 95% this spring. It spiked last fall when there was a rush on condos right before the ski season. And it has now fallen to give way to the single family housing market, which is typically stronger than condos in the spring/summer seasons.
For non-REO single family homes, the average sales-to-list price ratio had been 94-95% in the three seasons prior to this spring. All of a sudden, it jumped up to 97% this spring. Nationally, the ratio is currently 97% as well.
The way these numbers manifest themselves is during contract negotiations. It used to be that buyers would feel comfortable offering 80-90% of the asking price and then end up settling on a price in the low 90%-range of the asking price. Sellers were glad to receive an offer and come down in price.
Now, we are counseling buyers to go in stronger or else their offers will not be taken seriously or even responded to. And often, there are multiple offers to compete against. Sellers have become emboldened to list their properties higher to begin with and end up with a sales price that is higher than recent comparable sales.
So, is it time for buyers to panic … have they missed the bottom of the market?? I have a hard time believing that this market is going to be as hot as it was in the 2003-2005 period when we have 20+% appreciation each year. In addition, spring is the time of year when our inventory tends to swell and more choices come onto the market. Wait for the right property and let us help you with some up-front research into financing options, the ins and outs of homeownership in Mammoth, and the differences between various condo complexes.
Meanwhile, the flowers are out early this spring. But there is still skiing to do (through Memorial Wknd). Fishing opener on Crowley Lake was a success. And we’ve both gotten our trailers out of winter mode and gone camping with the spouses and kids. Life is good!