Living in the Bubble

I often feel as if today’s Montecito real estate market is something of a bubble. Not that it is a bubble about to burst, rather the bubble we live in, where the outside world does not seem to exist. We have everything we need right here it feels. And as for home prices, we have seen as the pandemic hit town, prices went up. Construction prices go up, more people undertake renovations or new builds. Inventory goes down, prices go up; inventory goes up, prices go up. Rates go up, prices go up. When will this slow down, if ever? I keep looking for the moment when I can say it is here, happening, the gold rush is over. But for now, those looking to sell will in most cases, achieve top dollar historically.

I say this having watched a couple of up and down markets now (1995 – 2005, very bottom then way up, and 2005 – 2010 way up and then way down). 2010 – 2014 was slow going. Peaks and valleys along the way. 2015 – 2020 was a slowly up-trending market, beach front homes started to see their value recognized (Miramar, Butterfly, Fernald), but otherwise sales and prices were like ripples softly hitting the shore… and then, the pandemic hit and our market surged and keeps on surging.

From mid-2020 forward, Montecito (and much of Santa Barbara) have seen their prices double. Finished homes in Montecito from $5M to $50M are all in serious consideration each day. Not, “let’s put it on the market and see if anyone is interested,” or as a buyer, “let’s wait and see if they lower the price.” 

Ours is a market where one can rely on a specific buying strategy. Each home that hits the market has its own momentum (or lack thereof), regardless of market conditions. A home hits the market priced high and goes quickly, and another comes on at a logical price and sits for a while. It is often surprising what sells and doesn’t sell quickly. That said, it only takes one buyer, someone who loves the home and who can afford it.

True, some homes don’t sell right away, or take some time. Sure, some homes and properties are more generally in demand than others (think modern farmhouse, Spanish, classic estates, modern, and again, anything done!). Often, high-priced fixers take a minute to move. That said, looking at recent sales, we see prices with fixers and teardowns reaching $4 to $5M per acre, and well more in prime locales. 

Some properties with a flaw or two, or missing a feature or few, may require one or two price reductions before finding a new owner (think small driveway, no parking, lack of privacy, too much work to do, small house to begin with, etc.). These are all points that might reduce the buyer pool, yet create opportunity for a buyer who is flexible on the condition of the property and amenities.

As of April 26, there are +/- 50 homes and condos on the market in the Multiple Listing Service (MLS) in Montecito’s 93108, which is up from the recent high 30’s to low 40’s of the past many months, so that is promising for buyers seeking options.

There have been +/- 17 sales thus far in April (to 4/26) in the MLS which is a solid number for any month, especially when it boasts four closed deals over $10M, the high being just over $30M for 4+/- acres of done, and done well on Picacho Lane, further cementing that calle as a top priced, if not THE top priced street (highest number of homes selling over $10 million) in all of Montecito’s 93108. Additionally, many homes continue to sell off market in all areas. This has been a growing trend over the past few years and becoming more common even in recent months.

What might be telling about upcoming May escrows is that we have only nine properties pending (in escrow) on 4/26, and unless many others are quietly under contract, the month of May might struggle to beat April sales numbers. 

For those looking to find a new home in the area, here are four properties that are/were still available as of April 27. Two homes on East Valley Road near Ladera Lane offer options for buyers who want either that quaint country, San Ysidro Ranch feel, or a more modern, larger square footage compound. Two other homes offer ocean views, with Mariposa being one of just a few ocean view homes priced under $7M, and the new build on Park Hill Lane is an ocean view architectural stunner. As I often say, get out your checkbooks, and as always, please keep Montecito friendly. Until soon… 

2868 East Valley Road – $4,900,000

This sprawling, single level, San Ysidro Ranch style home rests on 1 acre, secluded up a shared private lane, offering country living in a close to town location. Turn off East Valley Lane and be transported to a relaxed and creative environment where indoor/outdoor living is just a way of life. 

Enchanting gardens, fine finishes, sensational sunroom, lovely primary bedroom suite, terrific chef’s kitchen and more; 3 bedrooms and a den. Outdoor pizza oven, fireplace, and sweet chicken coop. Great workshop. Perfectly located between Montecito’s Upper Village and Summerland, surrounded by many more expensive homes and estate properties. 

2815 East Valley Road – $6,495,000 

This compound offers a lot of square footage for the price! Set on a level, nearly 1-acre parcel, this remarkable compound rests among a lush, mature garden setting. Nestled among a canvas of live oaks, boulders, and a series of verdant lawns, find the main residence, a 4,750 square foot, 4 bedroom 4 bathroom home. 

Look a bit further into the lot and gardens to find the second, plus or minus 1,500 square foot structure featuring 2 bedrooms and 2 bathrooms, a living room, den, and kitchen. Vaulted ceilings in the main house offer a lofty sensibility to the upper great room, while downstairs a second great room is ideal for media and play. Beyond the indoor spaces, beautiful private gardens, extensive decks, and patios foster an easy sense of indoor/outdoor living. 

975 Mariposa Lane – $6,595,000 

Breathtaking ocean vistas welcome you to this refined contemporary residence. Nestled on approximately 1+/- acre, this home, enveloped by majestic oak trees, features a spacious open floor plan featuring 4 bedrooms and 3.5 bathrooms. Expansive windows frame sweeping ocean and island panoramas. The inviting living room is graced by a vast window showcasing stunning ocean and island views and opens onto a private deck. 

A chef’s kitchen with generous center island features quartz countertops, custom cabinetry, and top-of-the-line appliances. The formal dining room bathes in natural light. The primary suite with walk-in closet and en-suite bathroom seamlessly connects to a den room with beautiful ocean views. Two additional bedrooms offer captivating views of the terraced and meticulously landscaped backyard. Additional amenities include a pool, built-in BBQ, wet bar, outdoor shower, and beautifully manicured gardens – all within the Montecito Union School District.

843 Park Hill Lane – $14,990,000 

Indulge in luxury living at this contemporary Don Nulty designed estate, where stunning architecture harmonizes with breathtaking panoramic views of the ocean, islands, and mountains. This remarkable new construction seamlessly blends modern design with the surrounding natural beauty. Floor-to-ceiling windows bathe the property in natural light, framing picturesque views that change with the light throughout the day and night. 

Upon entry, sleek interiors, soaring vaulted ceilings, and abundant sunlight create an inviting atmosphere throughout the residence. The open floor plan includes 3 bedrooms, 3 bathrooms, plus 2 half baths, a grand living room, chef’s kitchen, an office, den, gym, and an outdoor patio for dining al fresco. This offering is complemented by a detached 1 bedroom, 1 bathroom guest house on the gated +/- 4.42 acre property that defines the potential for indoor/outdoor living. This estate is conveniently located near the San Ysidro Ranch, hiking trails, beaches, Upper and Lower Villages and is within the Montecito Union School District.