Mammoth Lakes Real Estate Market Update for November 2023

Mammoth Lakes Real Estate Market Update for November 2023

The Mammoth Lakes real estate market steadily progresses toward a more balanced market as we enter the last two months of 2023.  This continued transition is influenced by various factors such as rising interest rates, growing buyer caution, and a limited supply of properties. Inventory (ie properties for sale) increased month over month from January to October with the first decrease in inventory in November. Inventory remains below the 10-year average. This chart illustrates the inventory levels for both condos and single-family homes over the past 10 months, represented in green.

The Mammoth Lakes real estate market summary as of November 1, 2023:

• Listings remain low but highest YTD levels.

As stated above, inventory levels on November 1 for both condos (54) and single-family homes (23) are down from October 1 (62/28) and still significantly below the 10-year average. The chart below shows inventory levels for 2013 – 2023 for both condos and single-family homes combined.

Low inventory isn't a phenomenon isolated to Mammoth Lakes; it's a reality across the nation, with only a few exceptions. Surprisingly, around 40% of homeowners in the United States have no mortgage. Among the remaining homeowners with loans, a staggering 70% are locked into interest rates below 4%. Consequently, many homeowners are hesitant to relinquish their low interest rates to venture into the current market, where interest rates have surged beyond 7%. This naturally results in a diminished pool of available properties for sale, contributing to the persistently low inventory levels.

• Prices are holding at 2022 levels.

The stability of prices in Mammoth Lakes is directly tied to the persistently low inventory levels. As long as there is a demand from buyers eager to invest in this beautiful location and the available inventory remains scarce, the pricing will remain stable.

• Interest rates.

While interest rates have gone down slightly recently, rates are at the highest point in the past two decades. The prevailing conforming rate for a 30-year fixed mortgage stands at 7.56%, while the rate for a 30-year jumbo mortgage is slightly higher at 7.87%. Mammoth Lakes buyers are predominantly making a discretionary purchase and financing is a convenience rather than a method of leveraging affordability.  As a result, high interest rates are not as much a deterrent as they are in primary resident communities. 

• Market Temperature

The era of multiple offers significantly exceeding asking prices has come to an end. Presently, the pool of potential buyers is decreasing, but these individuals are typically genuinely committed and financially qualified. Properties that have been updated and are ready for immediate occupancy consistently attract more attention compared to those in their original or dated state.  On October 18, 2023 the Town of Mammoth Lakes approved an ordinance which includes 45 day pause on new Short Term Rental (STR) permits in many local condo complexes (some licenses may be transferrable). This 45-day time period can be extended for up to a total of 2 years.  It is too soon to tell the short and long-term impact of this ordinance.

• 2023 Forecast

In the immediate future, inventory of available homes for sale is expected to remain below the 10-year averages. Should this supply remain insufficient to meet the demand, it's likely that prices will hold steady for properties that have been updated or remodeled. Conversely, properties in need of renovation may experience a decrease in their market value.  The number of sales in 2023 is on track to be approximately 35% below 2022 volume. Experts expect interest rates to go down slightly in the months ahead. We will continue to closely monitor the growing challenges associated with obtaining fire insurance in California and its potential impact on the market in the times ahead.  Also, we will continue to stay informed and be involved with the Town of Mammoth Lakes STR ordinance.

What's Happening in the Mammoth Lakes Real Estate Market?

It is helpful to look at the current market in two different segments:  condos/townhomes and single-family homes.  With half the year behind us, there is enough data to solidify the trends we have anticipated in previous months.  This data is through October 31, 2023.

Condos

• The YTD median sales price for condos through October 2023 was $761,250.  This is $2,250 higher than in 2022.
• While the median days on market is up from 2022, this number has been decreasing in 2023 and is currently 56 days. In 2022 the median days on the market was 53. This period begins on the property's listing day and ends when it closes escrow.
• 194 condos sold through October 2023 (average of 19.4 per month). In 2022, an average of 28 condos were sold per month.
• There are 54 active condos listed for sale on November 1, 2023 (down from 62 on October 1). For reference, there were only 3 condos listed in January 2022, and inventory steadily increased month over month until it started to decline in August 2022. While inventory is up from earlier this year, levels are remain below the 10-year average.
• There are 22 pending sales on November 1 compared to 20 on October 1 (includes 6 which are new construction with completion dates in 2024).

Single-Family Homes (SFH)

• The median sales price for SFH sold through October 2023 was $1,272,500. This is up from $1,217,500 in 2022.
• The median days on market for SFH sold through October 2023 is 57 days. In 2022 the median days on the market was 68 days.
• 51 SFHs sold through October 2023 (average 5.1/month) compared to 7 per month in 2022.
• There are 23 active single-family homes listed for sale on November 1. While inventory is up from earlier this year, it is still below the 10-year average.
• There are 15 pending sales on November 1 which is up from 11 on October 1.

What Does This Mean for Mammoth Lakes Area Homeowners and Sellers?

Maintaining realistic expectations is crucial when considering the sale of your property in Mammoth Lakes. This market sets itself apart from other regions in California, which primarily center on full-time owner-occupied homes. Mammoth Lakes predominantly serves as a second home or discretionary income market. As the market gradually returns to normalcy following the extraordinary "COVID era," it's important for sellers not to anticipate multiple offers exceeding their asking price. If you're even remotely contemplating selling, reach out to our team to schedule a no-obligation Property Playbook & Strategy session. With the right strategy and patience, we will get your property sold. 

What Does This Mean for Mammoth Lakes Area Home Buyers?

While the inventory remains limited, most sellers stand firm on their asking prices in this market. This environment caters to savvy buyers, and our expertise can be your invaluable asset in crafting a successful offer and securing a smooth closing. If you're not an all-cash buyer, it's wise to reach out to a lender in advance to obtain pre-approval and gain a comprehensive understanding of the various available options, especially as interest rates continue their ascent. We have connections with lenders boasting a proven track record in our area and innovative solutions, such as potential seller buy-downs of your interest rate for the initial 2-3 years. It's essential to note that lending regulations have evolved for many condo projects in Mammoth, with not all lenders able to finance specific projects. We can significantly enhance your prospects of attaining your dream property in this challenging market, so don't hesitate to reach out for a complimentary consultation that will set you on the right course to realizing your goal of property ownership in Mammoth Lakes.

Conclusion

Whether you are a seller or a buyer, there is no doubt you will benefit from teaming with an educated and experienced Realtor® to help you navigate the current market. We have tools, resources, and expertise to make buying and/or selling as hassle free as possible. 

Enjoy the Journey.  Love the Destination.

Notes:

1. All data are sourced from the Mammoth Lakes Board of Realtors. Data for Mammoth Lakes ONLY and not the surrounding areas.
2. *Median price = middle value.  This is a good indicator when there is significant data, as it minimizes the impact of unusually high or low values and provides a better perspective of the big picture.
3. **Total Available excludes properties under contract/pending that have not yet closed.