Mammoth Lakes Commercial and Residential Real Estate

One of the most frequently asked questions in the real estate community during the past two years is… “Have we hit the bottom yet?”, referring to the recent decline in real estate values.

While it may not be appropriate to answer with a definite “yes” or “no”, perhaps the best way to answer this question is to present factual information and allow the person to draw their own conclusions. Investors love data, and when interpreted properly this information can guide them to rational and educated decisions.

A recent analysis of condominiums and Single Family Homes (SFR’s) over the past 10 years resulted in a graph that shows a typical bell curve. To some, this may represent doom and gloom, particularly as they see the current median condominium price drop below 2002 levels. Average condominiums in 2002 were selling for $255,000. In 2011 the average sale is $225,000. The high in 2006 was $560,000. However, there are the optimists who will view this as a classic bell curve and an ideal opportunity to buy while there is “blood in the streets”.

Listening to the national news is depressing at best and enough to deter just about anyone from jumping into the investment world, if not out a window; unfortunately this is a primary source of information for many people. I’d offer to change the channel from time to time and look at other markets. There are some statistics in micro-economies, like Mammoth Lakes, that are bucking certain trends and even showing signs of strength.

I’ve been conducting informal surveys within Mammoth in order to get a grassroots understanding of our local economy. I’ve spoken with a number of lodging operators and restaurateurs in order to gain local insight of what is currently taking place our small business world. What I found is that many of the restaurants are experiencing close to, if not, record years in business. Many of the lodging operators are experiencing similar trends, with occupancy levels and average daily rates nearing new highs. Granted this doesn’t apply to everyone in town and it certainly doesn’t establish the bottom of a market, but it does provide an exciting alternative to national or world news.

Another significant piece of data that I expect will shock the Mammoth Community, come the end of 2011, is the total number of people flying commercial air service to and from Mammoth. It seems that nearly every time I’ve departed Mammoth by way of Alaska Airlines the plane is near capacity. Other frequent flyers have reported similar experiences, and often during mid-week flights. I would venture to guess that flights from Orange County and San Diego will also prove to exceed expectations.

There is a lot of information out there and what to do with it is a big question. In a recent meeting with the newly formed Economic Stimulus Council, one of the first goals of the group was to gather a cross section of relevant data and generate a quarterly Indicators Report for which the Mammoth community will be able to analyze changing trends. The report will show strengths and weaknesses within the community and provide a snapshot of Mammoth’s overall economic health. This report should be out this fall, and will hopefully create a reliable baseline moving forward.

Now, I don’t think that anyone can honestly predict when the economy will “hit the bottom”, but gathering as much reliable information as possible will help. There is a lot of negative news out there for sure, but don’t let it dissuade you from seeing the positive too.