IF all you have ever wanted for Christmas was a second home in Mammoth Lakes, this may be the season Santa delivers.
It's not that the prices have tumbled from the heights of the last few years -- the average price of a Mammoth condo in 2005 was $595,000, compared with $661,520 through Sept. 30, 2006 -- but the current market is so glutted with unsold units that even St. Nick might pounce if prices start to melt.
Until now, the real estate market in Angelenos' favorite ski resort has echoed that of the rest of the state: high inventory, slow sales and prices moving like unwaxed skis on spring snow -- which is to say, they're not budging.
The numbers tell the Mammoth Lakes story: There are 217 condos listed for sale and 220 licensed realty agents trying to sell them.
The difference between Southern California and Mammoth Lakes, of course, is that the resort community's market is overwhelmingly second homes. And in a financial crunch, people sell their vacation home before letting the bank claim their principal one. There is just, apparently, no such crunch yet.
So, why might 2007 be especially good to Mammoth Lakes home seekers?
Because the 2006 fall buying season was as flat as a dying aspen leaf. And unlike in other locales, Mammoth's real estate buying cycle kicks into high gear in autumn. Purchasers are hoping to close escrow in time to use their new second home for the holidays and winter skiing. Or, for those who are buying as an investment, in time to collect those premium rents for holiday weeks.
But that didn't happen this year. In fact, only 124 condos and 20 homes were sold from June 1 to Nov. 1. That compares with 214 condos and 53 homes in the same period last year -- although those figures may be somewhat skewed because there was a flurry of sales activity right after the Oct. 5, 2005, announcement that Barry Sternlicht of Starwood Capital was buying the mountain.
With a slower-than-usual autumn sales season, there's a lot of leftover inventory on the market right now, and just down the road is the area's traditionally slower spring selling season.
In the spring, the popular ski trails start to show rocks and dirt. Mountain attendance tapers off, and with fewer people coming, there are fewer lookers and fewer buyers. Those who do buy in the spring must be able to carry the unit with less rental income until the ski crowd returns the following winter.
For some, it's a daunting prospect as they face mortgages -- and homeowner association fees ranging from $125 to $900 a month -- and have to wait three seasons until the big wave of visiting renters resurfaces. Mammoth's summer season draws some vacationers, but nightly rents are substantially less than what winter visitors pay.
Karen Nelson, president of the Mammoth Lakes Board of Realtors and an associate broker of Re/Max of Mammoth, says that although there are no bargains per se right now, Mammoth has some decent buys.
And, she adds, there are sellers who want out now. The trick is to find them.
One interesting deal recently on the market was an upstairs corner studio unit with a separate sleeping area and vaulted ceilings. It was sold in a sealed-bid auction in a probate sale with the minimum set at $195,000 and the seller reserving the right to reject all offers. The unit, a fixer, was sold as is.
Range of choices
For those less disposed to spending time with a hammer and nails, the next least expensive unit is a studio with about 500 square feet of space in the 30-year-old St. Moritz complex for $239,000. It's been on the market since July.
Moving up the price ladder, there is a 628-square-foot one-bedroom east-facing mountain-view unit at the Juniper Springs Lodge, one of the Intrawest projects, listed for $485,000. There are granite countertops in the kitchen, and the building, built in 1999, has many amenities including three Jacuzzis, a heated pool and an on-site grocery store and coffee house.
There are also plenty of units in even newer complexes sprouting "for sale" signs. A 1,126-square-foot, two-bedroom, two-bathroom newly built condo in the Solstice complex that sits on the 16th fairway of the Sierra Star Golf Course is listed at $825,000.
Then there are the 200-plus other listings. So this should translate into prices starting to fall right around the time the snow does, right?
"Not necessarily," said Realtor Nelson.
Mammoth's market historically defies predictability.
Back in 1996, when Intrawest arrived on the scene, heads were scratched in disbelief as people lined up to pay what were considered unheard-of prices for Mammoth. Mark Myhedyn, sales director of Playground, the Intrawest marketing and sales arm, recalls a sales event held at the Santa Monica Airport in 1998 when 129 of Juniper Springs' 174 units were sold in an incredibly short space of time. "We sold $36 million in real estate in six hours," he said. At the time, prices averaged $370 per square foot.
That was followed by all 77 units in the Sunstone Lodge complex selling out in three hours at a Santa Monica hotel. Just for good measure, Playground also sold the last nine available units of Juniper Springs during those three hours.
History repeated itself in 2003, when -- this time in a market saturated with new units -- people paid premium prices for yet more condos in this ski hamlet. And then Intrawest sold out its final 52 Grand Sierra Lodge homes in four hours. The price tags: from $380,000 to more than $1.3 million.
The same thing happened last spring. When the buying frenzy elsewhere started to cool noticeably, it didn't stop Intrawest's Westin Monache at Mammoth from selling out all 141 of its condominium suites in less than four hours, at prices ranging from $405,000 to just under $1.3 million. And the price per square foot has soared to $850, Myhedyn said.
Old-timers remember how concerned people were that the town's older and less shiny complexes would suffer compared with all the spiffy newcomers. After all, naysayers lamented, it would make sense that the rental dollars would head for the new buildings and that no one would want to buy in an older complex that lacked fancy amenities.
Did it happen? Hardly. Complexes such as the venerable 1849, located near Canyon Lodge, appreciated handsomely. In 2002, two- to four-bedroom units there sold at prices from about $245,000 to $350,000. In 2005, closing prices ranged from $505,000 to $835,000.
The Mammoth market can get jolted by something as simple as a discounted season ski pass -- conceived of as a way to ensure that fickle skiers wouldn't break off relations with the mountain during snow-drought winters. A ski pass for the whole season could be bought for less than the price of 10 daily lift tickets.
An unintentional offshoot of the inexpensive pass was a sudden boom in sales of the lowest-priced condos by weekend budget skiers. And in the greater realty food chain, those condos were meant for Mammoth's labor force, who now need to commute in from Crowley, June Lake and even Bishop.
Despite frequent seismic activity and the drive of more than five hours from the L.A. Basin, Mammoth Lakes continues to be the destination featured in most Southern Californians' dreams of escaping the rat race -- if only for a brief time.
The town of 7,400 adds 40,000 to 50,000 visitors over Christmas week and winter holiday weekends.
And, notes Realtor Nelson, they all have to sleep somewhere.
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By the numbers
A snapshot of realty activity in Mammoth, week ending Dec. 16.
Condos on market: 217
Price range: $239,000-$2,225,000
Median listing price: $625,000
Condos to escrow: 1
Condos sold/closed escrow: 3
Homes on market: 70
Price range: $619,000-$6.5 million
Median listing price: $1.3 million
Homes to escrow: 0
Homes sold/closed escrow: 0
Data provided by Re/Max of Mammoth