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Verena Robinson's Blog

By Verena Robinson | Agent in Mammoth Lakes, CA
  • Financing for Mammoth Lakes Condo Hotels

    Posted Under: Home Buying in Mammoth Lakes, In My Neighborhood in Mammoth Lakes, Investment Properties in Mammoth Lakes  |  August 31, 2012 10:13 AM  |  425 views  |  No comments

    After the house of cards came crashing down in 2008, there has been a standstill for financing on all condos located within complexes that are considered “condo hotels”.  Many prospective buyers who have come to Mammoth in search of the right vacation home (which they can also rent out to help offset the costs of ownership) have had to come in with cash to purchase.

    Not only did the lending industry tighten up requirements for those looking to qualify for a loan on a primary residence, but the first to go was the “investment property” or “condo hotel” from most portfolio lenders’ pool of funds, and eventually, all lenders.  Why did this happen?  Or, what caused lenders to stop financing most condo purchases in resort areas?  Well, from what I understand, this restriction was due in large part to the Las Vegas condo hotel boom, and buyers flooding in to purchase based on the speculation to make rental income.  This eventually led to the classification for any and all resort condos (new or old) that had a rental office onsite to be blacklisted in the lending industry.  Both Bank of America and Chase will not loan on any condo purchases in Mammoth Lakes.  Wells Fargo Home Mortgage, Mammoth Lakes is the only lending institution that has been successful in funding loans for condos that were once included in the “condo hotel” classification. 

    This lending restriction has impacted property values negatively as purchases for these types of properties are limited to cash buyers.  However, there has been no shortage of cash buyers flooding in to buy these discounted “condo hotel” type units.  If the price is right, there are usually multiple offers on bank-owned properties or “REOs” (Real Estate Owned) that drive the price up over the asking. 

    The classic “condo hotels” such as the Village at Mammoth, which includes Grand Sierra Lodge, Lincoln House and White Mountain Lodge, Westin Monache and Juniper Springs Lodge have seen their share of distressed properties hitting the market over the past few years.  It is clear that a “bottom” has been reached at these developments with strong price support ranging between $215,000 and up for the 1-bedroom units and $350,000 and up for the 2-bedroom units. Many prospective cash buyers take a look at the convenience of either being slope side at the Juniper Springs resort or being in the center of it all (complete with Gondola access direct to Canyon Lodge, shopping, dining and entertainment), not to mention the impressive rental income that most of these units generate, and they can’t deny it’s a great lifestyle and future investment purchase at rock-bottom pricing.  The Westin Monache, which is located across the street from the Village at Mammoth, offers modern and stylish condo hotel suites, which have also been selling for rock bottom prices.  Out of any of the “condo hotel” projects, the Westin Monache is clearly the winner when it comes to the highest grossing rental income numbers in town. 

    Over the past few months, we’ve actually seen a couple of financed sales close for condo hotel units at the Village at Mammoth, Westin Monache, and Juniper Springs Lodge.  One of these lenders provided me with approximate terms and rates.  “Loan programs offered are for a term of 30 years, fixed for the first 3, 5 or 7 years, then becoming adjustable afterwards.  Rates will be in the low 5's assuming 740+ credit.  Zero point programs for a $900 loan origination fee.  The minimum credit score requirement is 680, tough exceptions have been made.  70% financing for second homes and 50% for investment properties”.   Property qualifications include that condo hotel suites must have a full kitchen and bath, be a minimum of 500 SF, with no lending for studio units. 

    This could be the first sign of easing of lending restrictions, which has held the housing market and property values down over the past few years.  Prior to the financial crisis, as lenient as lenders were, they went 180 degrees in the opposite direction, and went overboard by overregulating the lending market.  This is what has unfairly held qualified and responsible buyers with income and credit scores out of the market.   Once financing becomes widely available for these condo hotels, pent-up demand will add to the competition, which will clear out the supply of the already low inventory, and prices will most likely begin to increase…   

    Posted August 27, 2012 by:

    Verena Robinson, Broker Associate
    DRE License #01512209
    RE/MAX of Mammoth
    toll-free (877) 924-8521
    verena@verenarobinson.com

  • Mammoth Homes: Nightly Rentals

    Posted Under: In My Neighborhood in Mammoth Lakes, Rentals in Mammoth Lakes, Investment Properties in Mammoth Lakes  |  August 31, 2012 10:11 AM  |  447 views  |  No comments

    Did you know that most of the homes in Mammoth cannot be rented out on a nightly basis?  Many people who contemplate buying a vacation home in Mammoth Lakes with the intention of renting it out on a short-term basis will not be able to do so in most of the residential subdivisions.

    The Town of Mammoth Lakes has an ordinance, which strictly prohibits the “transient” rentals of single family residences (SFR).  A transient rental is defined as “30 consecutive days or less in exchange for a fee or similar consideration”.  The Town of Mammoth Lakes has a zoning map, which outlines the exact areas where nightly rentals are permitted -- the pink shaded areas labeled “resort”.  The yellow shaded areas are labeled “residential” and transient rentals are not permitted in these subdivisions.  To access this PDF zoning map, please click on the following link, and click on zoning map: http://www.verenarobinson.com/mammoth-properties .

    Only “resort” designated residential subdivisions are able to rent out their homes as transient rentals.  These resort designated subdivisions include: Greyhawk (Bridges Lane & Greyhawk Court), Juniper Ridge (Old Juniper Lane, Juniper Road, and Juniper Court), Lodestar Drive and Starwood.  Although Starwood is zoned “resort” the CC&Rs prohibit transient rentals.  If the homeowners within the “resort” designated subdivisions wanted to change this restriction in their CC&Rs, they would have to have a majority vote by the Homeowner’s Association to implement this change. 

    Many people ask “How will the Town find out if I decide to rent out my house on a nightly basis”?  For many years, the Town never went out of its way to enforce this ordinance, but lately, they have hired staff specifically for the purpose of monitoring suspected illegal rental activity.  It is unclear what the Town would impose on homeowners as fines, but a minimum of the Transient Occupancy Tax (TOT) of 13% would have to be paid for each night discovered. 

    Another common question that prospective buyers ask when they learn of this ordinance is “How can the Town dictate what I do with my property as fee simple ownership?”  This is a very good question.  It reverts back to the individual homeowners in Mammoth who enjoy the peace and quiet of not having transient rentals checking in and out of the house next door every few days…  The residents and home owners of Mammoth Lakes want to keep the zoning the way it is and would actively challenge any movement to change this ordinance. 

    I always recommend to clients who are considering a purchase in Mammoth, and want to generate rental income to offset their costs, to focus on condos and townhomes.  These are very user-friendly and easy ways of owning a vacation home property, which can legitimately generate income. 

    Another option to generate income on homes in Mammoth is to offer the property as a seasonal rental.  There are so many families from Southern California with kids on the ski team who are always looking for a residential seasonal rental they can share with another family.  There is a demand for this type of seasonal rental for homes that could be lucrative for the property owner to legally generate rental income.   To search for homes or condos in Mammoth, please click on the following link: http://www.verenarobinson.com/search-mammoth-properties  .

    Posted August 13, 2012 by:

    Verena Robinson, Broker Associate
    DRE License #01512209
    RE/MAX of Mammoth
    toll-free (877) 924-8521
    verena@verenarobinson.com

  • June Mountain Ski Resort Closes

    Posted Under: General Area in June Lake, Parks & Recreation in June Lake, In My Neighborhood in June Lake  |  August 31, 2012 10:08 AM  |  375 views  |  No comments

    After 50 years of continuous service, on June 21, 2012, Mammoth Mountain Ski Area (MMSA) and Starwood Capital Group LLC, announced that they will close June Mountain ski area for the 2012 summer season and 2012/2013 winter ski season.  Because June Mountain has been operating at a deficit since MMSA purchased the resort in 1986, the decision was made to suspend operations in order to properly plan for the reorganization and restructuring of the resort.  

    MMSA had originally planned to expand the Mammoth Mountain and June Mountain ski resorts by building additional ski areas along the San Joaquin Ridge, which would connect both resorts.  Due to many unknown reasons, this vision never materialized.   

    Intrawest had great plans to build a mixed-use development at the base of June Mountain ski area referred to as the “Rodeo Grounds”.  This would have included approximately 400,000 square feet of new residential space, and 25,000 square feet of commercial space. 

    Clearly, over the past several years, there has been a strong anti-development group in June Lake, who didn’t want a “world class ski resort” in their backyard.  This vocal anti-development group, who proudly displayed bumper stickers saying “Don’t Mammoth June”, has jeopardized the economic stability and future of a resort that relies solely on tourism to survive. 

    It is my opinion that if Intrawest would have been welcomed with their development ideas and gotten approvals to expand the resort area, the June Mountain ski area may have possibly survived the current economic downturn as well as last winter’s lack of snow.  There appears to be an obvious connection between the timing of Intrawest’s abandonment of the June Mountain development plans and MMSA’s subsequent decision to close the ski area.

    It was a difficult decision for MMSA, as it will impact the lives of the local residents, businesses and workforce.  However, it’s all about dollars and cents.  MMSA couldn’t continue to hemorrhage cash into an outdated operation.  The development of the Rodeo Grounds would have promoted tourism and maintained interest in this resort area.  The resort needed to grow in order to have a sustainable future. 

    There is a lot of competition for today’s tourism dollar.  The residents of the June Lake Village have to decide whether they want a thriving resort destination and partner with development, or become the second ghost town in Mono County.        

    Posted July 1, 2012 by:

    Verena Robinson, Broker Associate
    DRE License #01512209
    RE/MAX of Mammoth
    toll-free (877) 924-8521
    verena@verenarobinson.com

  • Mammoth Lakes Real Estate

    Posted Under: Market Conditions in Mammoth Lakes, Home Buying in Mammoth Lakes, In My Neighborhood in Mammoth Lakes  |  August 31, 2012 10:05 AM  |  365 views  |  No comments

    Mammoth Mountain ski area officially closed for the season on Memorial Day weekend.  After a below average snowfall year, this marks one of the earliest closings in several years.  The much anticipated flood of properties hitting the market in the early to late Spring, just haven’t materialized (yet).  This poses an interesting outlook for the micro resort real estate market, which the resort town of Mammoth Lakes represents.  Although many Mammoth Lakes condo owners rely on a good snow year to attract tourism and the subsequent rental income it provides, it appears as though many may have weathered the storm, or lack of storms. 

    Properties are trickling onto the Multiple Listing Service (MLS), but at a very slow rate, and at significantly higher prices than recent sales comps would support.  If our supply continues to remain somewhat low heading into the busy summer selling season of mid-July through September, and demand is steady, the Mammoth real estate market could see property values stabilize.  This is one possibility.  

    However, those of us who follow what is going on behind the scenes realize that there is a glut of distressed properties that haven’t yet surfaced.  There are countless properties in Mammoth Lakes that are in default, but the foreclosure process has clearly slowed.  It’s hard to anticipate what type of government bail-out scenarios or incentives for homeowners who are upside down or under water on their properties, will take place over the next few months.  It is my opinion that simultaneously flushing out all distressed properties sooner, rather than later, and letting the market finally correct and recover would allow for a healthy rebound to take place in the real estate market.  Prolonging the inevitable is only creating a longer and more painful recovery. 

    What’s interesting is that the most commonly asked question over the past few years: “Are we close to the bottom yet?” seems to be asked less and less.  Perhaps the new question is: “What am I waiting for?”  Although it’s nice to pick an investment at the bottom, and sell it for a profit, that is difficult to do.  While the rate of decline in property values has significantly decreased, for many, we have gotten “close enough” to the bottom that any further downside risk seems insignificant when weighing the lifestyle benefits of buying sooner rather than later. 

    For those that love to come to Mammoth Lakes in the summer, this should be an excellent and long summer season with beautiful weather to enjoy the backcountry, mountain-biking, golf, fishing, tennis, and all of the wonderful activities that the Eastern Sierra has to offer for a good solid 3+ months. 

    Please feel free to navigate my website and search for current and up-do-date Mammoth Mountain Homes for Sale and other helpful information.

    Posted June 4, 2012 by:

    Verena Robinson, Broker Associate
    DRE License #01512209
    RE/MAX of Mammoth
    toll-free (877) 924-8521
    verena@verenarobinson.com

  • Has the Lack of Snow for the Mammoth Mountain 2011/2012 Ski Season Affected Real Estate Values?

    Posted Under: Market Conditions in Mammoth Lakes, Home Buying in Mammoth Lakes, In My Neighborhood in Mammoth Lakes  |  August 31, 2012 10:03 AM  |  425 views  |  No comments

    Typically, this is the time of year when we begin to see an increase (usually pretty significant) in the number of properties hitting the market.  Most property owners who contemplate selling will usually wait until after ski season, which is especially true for condo owners.  For most complexes, since the bulk of rental income is generated during the months of November through April, once Canyon Lodge and Eagle Express close for the season, traditionally, our inventory increases. 

     

    One would think that after the lack of snow Mammoth has seen during the 2011/2012 ski season, there would be a glut of properties hitting the market.  However, this has not yet happened.  Because we experienced such limited snowfall this past ski season, our skier visits were down substantially compared with the past few years.  In turn, our overall ski season tourism numbers were down as well.  For those property owners who depend on the stream of rental income that the past few record-breaking snow years have brought, probably have felt the impact of the reduced rental income this year.    

     

    However, in answer to the question posed above, the answer appears to be “no”, at least not yet.  Our Mammoth Lakes spring real estate inventory continues to be lower than it’s been in previous years, and demand appears to be healthy for attractive and attractively-priced properties. 

     

    As of April 29, 2012, there are only 162 active condos and 57 active single-family homes on the market.  During this time of year, previous stats have been anywhere from 220 to 290 active condos, and 70 to 95 active homes on the market.  Our Mammoth real estate market sales data for year-to-date is as follows: 134 closed transactions 1/1/2012 to 4/29/2012, of which 30 were single-family homes, and 90 were condos.  Out of the 30 closed single-family home sales, 5 were REOs (Real Estate Owned – bank foreclosures), 10 were short sales, 1 probate, and the balance of 14 being traditional re-sales.  Out of the 90 closed condo sales, 15 were REOs, 28 were short sales, and 46 traditional re-sales.

     

    As the warm temperatures set in next week for a steady period of highs in the mid-70 range, the snow will begin to melt fast.  Perhaps after ski season is officially over (if it makes to Memorial day weekend as planned), we may begin to see the large numbers of inventory hitting the market that would be expected after one of the most uneventful ski seasons in 20 years.  Or, maybe the bulk of the distress is gone from the market?  Stay tuned for the next post on REO inventory….

     

    Posted April 29, 2012 by:

    Verena Robinson, Broker Associate
    DRE License #01512209
    RE/MAX of Mammoth
    toll-free (877) 924-8521
    verena@verenarobinson.com

  • What are the best property investments in Mammoth?

    Posted Under: Home Buying in Mammoth Lakes, In My Neighborhood in Mammoth Lakes, Investment Properties in Mammoth Lakes  |  August 31, 2012 10:02 AM  |  442 views  |  No comments

    This question comes up time and time again.  Most buyers looking for property in Mammoth usually want to invest in a property that they will not only enjoy, but will also generate decent rental income, and appreciate in value when the market rebounds.  When clients ask what the best property investments are, I always recommend:  Location:  At or adjacent to the amenities (ski slopes and golf), high rental-producing complexes, and/or newer construction. 

    Location is still the most important factor when looking to invest in real estate.  Those properties that are located within walking distance or are “ski-in, ski-out” (The Bridges, Eagle Run, Sunstone, Juniper Springs Lodge, 1849, Sierra Megeve, etc.), golf course properties (Snowcreek 5 & Lodges, Timbers, Woodwinds, Solstice, Mammoth Green, The Cabins at Crooked Pines, etc.), or creekside/meadow area of Mammoth (Snowcreek 1-4, Creekhouse, Mammoth Creek, Snowflower, Sunrise) will be more attractive to investors and have greater resale potential.    

    If rental income or return on investment is important, buyers should consider well-managed complexes, such as the “condo hotels”, which have the highest rental income figures.  Some of these complexes include Juniper Springs Lodge, Sunstone, Eagle Run, Lincoln House, White Mountain Lodge, Grand Sierra Lodge, and The Westin.  Units within these complexes will receive the most exposure through a sophisticated advertising campaign to draw in the Mammoth visitor with attractive flight and lodging packages.  Currently, cash is required to purchase within a condo hotel.  Once financing is available at these complexes, the demand will most certainly increase. 

    When looking at the various property options, it’s obvious that newer construction will have the most current building and safety codes, and will imply that the property owner won’t need to worry about a looming large scale assessment to replace siding, roofs, windows, etc.   Most buyers are gravitating towards a newer development or newer construction home for those reasons. 

    Today’s buyer has many options, but it boils down to personal preference and price range on determining the best property for the ideal Mammoth investment or vacation home. 

    Verena Robinson, Broker Associate
    Re/Max of Mammoth
    DRE License #01512209
    verena@verenarobinson.com
    toll-free (877) 924-8521

  • Hotcreek Lawsuit: Town of Mammoth Possible Ramifications

    Posted Under: General Area in Mammoth Lakes, Quality of Life in Mammoth Lakes, In My Neighborhood in Mammoth Lakes  |  August 31, 2012 9:52 AM  |  173 views  |  No comments

    By now, we’ve all heard about the $30 Million judgment (which is now worth $40 Million) that was awarded in favor of the Mammoth Lakes Land Acquisition (MLLA) for breach of contract by the Town of Mammoth Lakes.  

    Recently, I’ve had many clients ask me how this judgment will impact general Town services, the property owner, and the visitor.  It’s difficult to pin down concrete facts on what we can expect going forward, but a few things, we know to be true.    

    Essential Town services will continue as always.  This includes fire protection, police and road maintenance.  It is unlawful for the public to be endangered by eliminating essential services.  With regards to increased property taxes, the State and the County mandate taxes set by Prop 13 at 1% of the assessed property value.  However, it is possible that the Town could initiate a voter-approved special assessment to pay for the judgment, but this scenario would be highly unlikely.  With regards to the recent rumors and speculation that the Town may liquidate assets (such as the much talked about Bell parcel located at the corner of Minaret and Meridian) to help pay for the judgment, my sources say that the Town cannot liquidate or sell assets, which are held in a public trust. 

    In the event that the Town cannot generate sufficient additional revenues to satisfy the judgment, then municipal bankruptcy is an option that the Town is currently entertaining.  Through Chapter 9, Municipal Bankruptcy, the threat of bankruptcy could substantially lower the judgment amount, and extend the payment period over many years.  However, the biggest problem of filing for bankruptcy is the stigma in the bond market.  This is because the municipality has to pay higher interest rates or because it can’t obtain any credit in the market.  This could impact future development by the Town of Mammoth.

    As I see it, there are two possible options to generate the funds necessary to pay the settlement amount.  Increase revenues, or cut Town services.  If the Town raised the Town Occupancy Tax (T.O.T.) to help pay for the judgment, property owners may be impacted in an indirect way by limiting the pricing power of their asset.  This could result in loss of rental income and ultimately a decrease in overall asset value.  A cut in services could result in a pay cut for Town employees, elimination of whole departments, and/or a renegotiation of pension plans going forward. 

    As this blog post addresses the recent concerns by property owners and potential property owners, it is unlikely that there would be a substantial negative impact on property values and essential services.

    To be continued…      

    Verena Robinson, Broker Associate

    Re/Max of Mammoth
    DRE License #01512209
    verena@verenarobinson.com
    toll-free (877) 924-8521
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