by Bob Hazard
According to broker Wendy Gragg, president of Montecito’s Distinctive Real Estate, many high-end buyers appear to be holding back from purchasing in Montecito, at least for the time being. Gragg sees the mid-year Montecito real estate market as slowly shifting from a seller’s market toward a buyer’s market. As more sellers list their homes, buyers are taking a “wait and see” approach, hoping prices may soften.
Gragg expresses long-term confidence in the Montecito marketplace, noting that sellers with desirable properties still have the upper hand. However, recent buyers – though fewer in number than expected – seem increasingly willing to wait, negotiate, or submit “low-ball offers.”
Recent Sales and Listings
Multiple Listing Service (MLS) data as of July 30, 2018, shows that the number of home sales is down 34% for Montecito in 2018; total dollar volume sales are off 42%; and median price sales are off 16%. At the end of July…
The $1-3 million real estate market has 47 active listings; 38 sold in 2018; 7 are in escrow.
The $3-5 million market has 28 active listings; 19 sold in 2018; and 3 are in escrow.
The $5-10 million market has 38 active listings; 7 sold in 2018; 2 are in escrow.
The over-$10 million market has 20 active listings; 3 sold in 2018; 3 are in escrow.
Significant Real Estate Sales
Dan Encell, Berkshire Hathaway HomeServices realtor, reports: “Listings of homes for sale in Montecito climbed 27% in the first half of 2018, but there was a significant drop of 28% in the number of homes sold.”
According to Encell, the largest home sale in Montecito in 2018 was an East Valley Road estate that sold for $35 million. It had been on the market for 598 days and was initially listed for $52 million and then reduced to $45 million, asking. This was the second-largest home sale in Montecito history. There are at least three homes in Montecito listed for more than $15 million currently in escrow – one on East Valley Road, one on Picacho Lane, and another on San Ysidro Lane.
Ellen DeGeneresand Portia de Rossirecently sold their Wallace Frost-designed Tuscan Villa on Hidden Valley Lane – which had been on the market for 466 days, initially listed for $45 million and reduced to $38 million – for $34 million. This was the third-largest home sale in Montecito history. A second DeGeneres-de Rossi home sale Ennisbrook sold for $11 million recently.
Incentives to Rebuild
It is in the best interest of the County to ease rebuilding permitting restrictions to restore property valuations in Montecito as quickly as possible. Those homeowners who choose to rebuild will be required to locate farther from creek beds and to raise foundation elevations at least two feet above 100-year-flood levels. Additionally, many rebuild owners are choosing to add new perimeter flood walls.
Based on property tax assessment values of nearly $10 billion in residential property, Santa Barbara County officials had hoped that 2018 property tax collections might top $104 million. Montecito, with only 3% of the parcels in the County, is expected to provide 13% of the County’s $797 million in property tax revenues.
Prospective Montecito buyers are becoming increasingly aware of traffic congestion as GPS systems reroute 101 commuters through Montecito, fraying our laid-back community.Relieving traffic congestion by re-opening a new 101 southbound on-ramp at Cabrillo Boulevard; restoring the five closed bridges on East Valley Road; and repairing and re-coating the local streets of Montecito are all tasks for Caltrans and the County as part of the 2018 Montecito Recovery effort. Nevertheless, our little greenbelt community will survive as such, regardless of the growth elsewhere in the state. If rush-hour traffic is all we have to worry about, we’ll take it.
On the Positive Side
Harry Kolb, Sotheby’s International realtor, reminds us that our beloved Montecito will survive as “the perfect place to raise a family, where the weather is ideal, the air clean, and the schools, beaches, and parks are healthy, enjoyable experiences.” Kolb adds, “Montecito is the ideal retirement spot, a place rich with leisure and recreational pursuits – Montecito real estate is more than enchanting. The magnetism of this quiet coastal community is absolutely intoxicating.”
Questions for the Future
Primary and second home buyers, including foreign investors, may possibly be scared off from buying in Montecito in light of recent events, but the feeling around here is that they’d be missing a perhaps once-in-a-lifetime opportunity to buy into one of the most desirable communities in the world. Prices, while not bargains (yet), certainly have come under serious selling pressure and savvy negotiators could possibly benefit big time. The more than 500 homes damaged or destroyed represent almost 15% of Montecito’s home inventory. How many will be rebuilt, and in what time frame, and what that reduction in inventory will result in is unclear.
The likelihood is, however, that our climate, our schools, and our “semi-rural” ambiance will triumph in the end, even if that “end” is two or three years away.