Montecito Journal Real Estates 2023

PHOTO: VILLA DEL MARE, SANTA BARBARA OFFERED AT $25,000,000 RISKIN PARTNERS ESTATE GROUP, VILLAGE PROPERTIES

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Real Estate Snapshot – Every good player needs to assess their performance at halftime and this mid-year market update gives the stats needed to plan your next move

Real Estates – The different benefits of living in each of Montecito’s neighborhoods and the homes still available in them

Real Estate Roundup, SYV Edition – Here is an overview of the current real estate market throughout the Santa Ynez Valley

Commercial Corner – Why Montecito’s commercial real estate market is as hot as ever and what to keep an eye out for

The Flip Side of Prop 19 – The benefits of the recently passed proposition and how it affects your property tax basis when moving

Insurance Matters – With wildfire and natural disaster risks driving insurers out of California, what’s a homeowner to do? Here’s some ideas.

Power of Privacy – From private theaters to rounds of golf, here’s the different amenities and benefits of the private clubs of Montecito

Mortgage Matters – Different loan options for those that are asset rich yet “qualified income” poor

Investing in 93108 – How owning a Montecito property can be integrated into a strategic wealth plan

P.54 Reverse Mortgages – A look back at where reverse mortgages have been and how they can help you now

Owners Valerie & Daniel Pampel | Founded in 2017

#1 IN THE SB MLS FOR THE LAST 5 YEARS

#3 SMALL TEAM IN THE NATION IN 2022 ACROSS ALL BROKERAGES

Riskin Partners’ ensemble approach to service means that clients have the advantage of all four partners’ expertise and dedication. The Riskin Partners marketing team is dedicated solely to their listings and creates effective, innovative campaigns to ensure sellers get the attention and results they deserve. From start to finish, Riskin Partners’ clients are supported at every step of the way.

THE SUMMIT CARPINTERIA | $55,000,000

550 FREEHAVEN DRIVE MONTECITO | $21,750,000

4300/4200 ROBLAR AVENUE SANTA YNEZ | $10,950,000

Dina Landi, Robert Riskin, Sarah Hanacek, and Jasmine Tennis

THE HACIENDA RANCH SANTA BARBARA | $45,000,000

5368 RINCON BEACH PARK DRIVE VENTURA | $6,750,000

2170 ORTEGA RANCH LANE MONTECITO | $16,250,000

VILLA DEL MARE SANTA BARBARA | $25,000,000

850 ROMERO CANYON ROAD MONTECITO | $10,995,000

1326 HILLCREST ROAD SANTA BARBARA | $5,000,000

Real Estate Snapshot

by Kelly Mahan Herrick

Mid-Year Market Update

The numbers are in for the first half of 2023, and the Santa Barbara South Coast real estate market remains tight in terms of inventory and well in favor of sellers, as there is simply more buyer demand than homes available for sale. Accordingly, the number of sales is down 32% over last year, with just 370 homes and PUDs sold in South County Santa Barbara yearto-date. This is the lowest number of properties we’ve seen change hands in the first half of the year, since 2009! Normally by the end of Q2, we would expect to see the number of sales in the mid 500-range.

The year-to-date median sales price of homes, estates, and PUDs is right around $2,130,000, which is down from June last year, when it was $2.25M. This is a 5% reduction in median sales price. Average sale price YTD is $3.3M, which is down 4% from last year. Sold volume is also down 35% over last year, which is a direct correlation to the lack of inventory.

June Sales Slumped

Singling out the month of June, we saw the closing of 75 homes/PUDs compared to 104 in the same month last year. In 2021 that number was 127. Median sales prices in June was $2.25M, up from $2.225M in May. Month over month, median sales price remains fairly stable.

While June is typically a busy month with many new listings and lots of closings, our dreary weather this year played a big part in many sellers choosing to wait to list their homes. We currently have about 201 active listings from Carpinteria to Goleta. In pre-pandemic times, that number would be around 600! This translates to a 2.13-month supply of homes if no other homes are to come on the market. In June 2018, the inventory was at a 4.84-month supply, for perspective. A popularly held rule of thumb is that once you hit a 6-month supply, the market shifts in favor of buyers. While the inventory remains staggeringly low, it’s the highest number of homes and PUDs we’ve seen on the market since September of last year. This is a good thing to lessen up the gridlock in the market.

Days on Market Decreasing

Another interesting statistic is a decrease of what we call “cumulative days on market,” or CDOM. This is a number that takes into account the number of days the home has been listed, regardless if the listing was withdrawn or canceled and relisted with a different agent. In May, the average CDOM was 38, which means the sold properties were on the market an average of 38 days before selling. In June that number dipped to 23, which shows that well-priced properties are selling quicker, and many with multiple offers.

Inventory Remains Low

We’ve had 538 new listings hit the market in the first 6 months of the year, compared to 675 in 2022; a 20% reduction. Not surprisingly, the number of properties that went into escrow is also down 27%, from 389 this year to 530 last year.

Real Estates

by Mark Ashton Hunt

The Many Neighborhoods of Montecito

When you decide to move to Montecito or if you live here already, you are likely aware that there are many smaller neighborhoods within the greater 93108, each offering their own charm, advantages, and distinct personality. From the Hedgerows to Eucalyptus Hill, to Toro Canyon, the beach area, and the Golden Quadrangle, it’s all good in the hood.

While writing here about the many neighborhoods in the area, I apologize in advance to anyone who feels I’ve gotten their piece of the 93108 wrong or left someone out. On my side is 20 years of enjoying the area, raising our daughter here, and working in and around Real Estate (and growing up visiting family who lived here before me). I think I’ve gotten to know the best of each area and will try and share here.

Now for purposes of giving a brief, yet hopefully thorough tour of Montecito and the greater 93108, I will start in the east and move west toward Santa Barbara, and have selected one home from each area that is currently (or as of this writing) for sale. Some neighborhoods mentioned have no homes on the market to choose from and many properties featured may go into escrow or change hands before you read this. These are the rollercoaster times we are in.

Toro Canyon

For our tour of Montecito’s 93108, let’s start closest to Los Angeles in rural east Montecito. This neighborhood runs from Toro Canyon in the east to Ladera Lane in the west, along with Hidden Valley Lane’s rolling foothills and lovely view homes. Many properties in this area have views, privacy, and often more than one acre, just a quick drive down to the beach and the 101 or along 192 (East Valley Road) into the Upper Village in Montecito.

Romero Canyon / Lilac Drive

Rural feeling yet in town neighborhood, rolling hills, close to town, from the east at Ladera and Hidden Valley Lane, running to Buena Vista in the west and from East Valley Road in the south, to Bella Vista Drive/Park Lane in the north. Homes in this area are within the Montecito Union School District and boast a mix of modern and historic estates, many tucked behind gates or up a long drive. It’s a very private-feeling area. From higher up big views on Romero to lower down neighborhood feel and big estates on

Ennisbrook

Home to many ocean view estates, located just a few blocks up from the ocean and in the foothills below Birnam Wood and the Romero/Lilac area is this guard-gated community, featuring numerous recent sales in the $10 to $20 million range. These higher prices along with the rolling hills are making it feel more and more like Los

Real Estates Page 404

Angie Huff, Architect

Romero and Lilac, etc.

900 Toro Canyon Road – $5,295,000 – A 2,500+ square foot main house and an impressive guest house/studio with garages and on-site parking for many guests, all on five open and private acres. Pool, deck, mountain and ocean views, etc.

719 Lilac Drive – $9,500,000 – Over 5,000 square feet on a +/- one-acre lot in a prime Lilac location. Enjoy ocean views, pool, etc. within the Montecito Union School District.

303 Meadowbrook Drive – $12,200,000 – Impressive, 7,000+ square foot, warm contemporary split-level home with main level primary suite and pool house, on a 1.38 acre, ocean view lot.

Real Estate Roundup, SYV Edition

by Kelly Mahan Herrick

Many Santa Barbarians, Montecitans, and Los Angelenos have caught on to what Santa Ynez Valley locals have known for decades: livin’ is good in the SYV. With several unique areas from which to choose, each with their own culture, lifestyle, and merits, it’s no wonder that residency in the Valley has exploded over the past few years, with people wanting to get back to a quieter, easier way of life. Here’s an insider look at the Valley and beyond, along with year-to-date stats, notable sales, and available listings.

Santa Ynez

Downtown Santa Ynez, with its bustling shopping and restaurant scene, is one of the Valley’s most coveted areas. The downtown district is flanked by gorgeous wineries, vineyards, and tasting rooms, most of which feature beautiful mountain or valley views.

There have been 24 home sales in Santa Ynez this year, ranging in price from a $805K fixer within walking distance to town, to a nearly $6M, 20-acre property in Woodstock Ranch. This is down nearly 30% from 2022, when there were 34 sales in the same time frame.

The sales in Santa Ynez in the first half of the year were varied in terms of price, condition, location, size, and acreage. Buyers ranged from first-time homeowners eager to get in the market, to seasoned equestrians and ranchers trading up, to Valley newbies from Los Angeles and beyond, securing their wine country estates. There were sales in Skyline Park, downtown Santa Ynez, and Woodstock Ranch, among other, more rural areas. Notable sales include the Tres Pinos Ranch, which had never been for sale since it was purchased as raw land in 1926 and sold with multiple offers in February ($1,375,000), and the Jenni Kayne Ranch, which sold in April for $5,995,000. The 20-acre ranch is located in the Woodstock Ranch community, and was beautifully remodeled by designer Jenni Kayne. It was purchased by a buyer from out of state. Currently on the market in Santa Ynez there are 16 properties, ranging in price from $995K to $20M. Those looking for expansive acreage should seek out Santa Ynez: there are currently multiple properties listed on over 125 acres.

One of Santa Ynez’s most notable available listings is the Happy Canyon Premier Equestrian Facility, which is situated on 160 acres and includes a professional racing track and multiple barns including a 37-stall Show Barn, 17-stall Foaling Barn, 30-stall Yearling Barn, 24-stall Breeding Barn with apartment, 8-stall Stallion Barn, 70+ individual paddocks with in/out shelters, 20+ turn-out pastures and dozens of pens, and multiple residences including a comfortable two-bedroom, two-bath main residence; two-bedroom, two-bath guest house; three-bedroom, two-bath manager’s house; breeding barn apartment; studio apartment; and employee housing with 24 units. The property is listed for $19,995,000.

Solvang

Ranch on Live Oak Road sold for $5,995,000 in April (listed by Laura Drammer, Berkshire Hathaway Home Services California Properties)

“The Danish Capital of America” brings droves of tourists every season to enjoy a slice of Danish culture. With over 120 boutiques, wineries, European bakeries, and restaurants, downtown Solvang is a highlight of the Valley. With several unique neighborhoods ranging from tract home developments to larger ranches, Solvang real estate is also bustling, drawing in families, second home buyers, and ranchers.

Solvang has seen the sale of 38 homes, condos, and PUDs, ranging in price from a $475K 1/1 condo to a $15M, off-market, 20-acre ranch. Sales ranged from areas of Fredensborg Canyon Road, to the quaint neighborhoods of downtown, to Sunrise Village, Skytt Mesa, Village Collection, Viking Hills, and others.

Two homes have sold this year in Alisal Ranch; when one purchases a home in the Ranch, the home is owned but the land is not, and there is a separate land lease that is readjusted every 10 years. There was a time when homes in this community were sold at about half the price of a comparable, fee simple home in Solvang. Now, homes in the Ranch sell for nearly the same market value that they would if the land

The Jenni Kayne

The Happy Canyon Premier Equestrian Facility is the highest-priced listing on the market in Santa Ynez, and features numerous barns and residences, as well as equestrian facilities (listed by Brett Ellingsberg and Claire Hanssen of Berkshire Hathaway Home Services California Properties)

An off-market sale in Village Collection – 210 Valhalla Drive – earlier this year broke records in terms of price per square foot. It was sold to a buyer moving from Los Angeles (listed by Kelly Mahan Herrick of Berkshire Hathaway HomeServices California Properties)

Real Estate Roundup Page 304

Commercial Corner

By Gene Deering

South Coast Commercial Real Estate Market Update

Montecito... Hot as a Pistol

Montecito’s commercial market has remained one of the bright spots on the South Coast. It seems as though Montecito is immune to rising interest rates or troubles that have bogged down other areas like downtown State Street. We are currently seeing all-time high lease rates and sale prices in Montecito. Why?

• Limited Product – There are only a few small commercial corridors, on Coast Village Road/Circle and East Valley Road.

• Small spaces – Unlike on State Street, many of the spaces are less than 1,000 square feet. And given the area’s attractive high-income demographics, renting a small space even at $7.00/square foot+ is a small monthly expense for tenants.

• Safety is not a concern for most tenants/shoppers in Montecito.

• Great retailers and foot traffic…. Chicken and the Egg. Can’t have one without the other.

• Certainty – Retailers are willing to take a risk and sign leases and undertake improvement projects as they have certainty regarding the marketplace in 1, 2, 3, 4, 5 years.

Industrial Real Estate: Incredible Recent Appreciation and High Rents

Speaking at an event five years ago, I mentioned the transition that we were seeing in Goleta and Carpinteria where industrial lease rates were in some cases higher

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than office lease rates. Last month two 5,000-square-foot industrial spaces in Goleta rented for more than what Class A Goleta office space is currently asking. Look for this trend to continue as our industrial vacancy in Santa Barbara remains below 1%. We have also seen Montecito residents building and leasing industrial buildings for their personal storage needs. For some of these residents, proximity and a ‘cool factor’ are more important than price.

Small Ball Leasing

It was not too long ago some of the biggest names in tech were fighting for large floorplates (20,000+ square feet) in Downtown Santa Barbara, Goleta, and Carpinteria. Landlords that could deliver big spaces were rewarded both with a great tenant and one who would improve property into Class A office space, sometimes at the tenant’s sole expense. In the current market, the smaller the space, the higher the lease rate. Most of the retail spaces on State Street are 1,500 – 4,500 square feet, much too large for today’s retailer. On the 900 Block of State Street there are 10 vacancies and all but one are 1,500 square feet or larger. Even with all the trouble on State Street, spaces under 1,000 square feet are still renting quickly for much higher lease rates. Big picture: small office, small retail, and small industrial tend to rent quickly.

New Interest Rates – New Market (Kind of)

When interest rates rise, cap rates (rates of return) typically must increase to account for the higher cost of capital. However, in a small, wealthy beach area this is not always the case. For smaller purchase prices (less than $2.5M) we have seen some impact on cap rates, but the impact is not proportional to the rise in interest rates. Apartment buildings have increased their cap rates, but only by a small amount comparatively, and the impact has been most pronounced on larger complexes.

A Banner Year for Commercial Sales

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ast year was record-setting for commercial sales on the South Coast (Goleta to Carpinteria) with 129 total sales (see chart). However, the start of 2023 has been more on par with our 15-year average with 42 sales transactions through Q2 (as of the writing of this report). It was not realistic to assume we could continue the momentum from 2021 and 2022.

Development –Apartments, Apartments, Apartments

Based on a shift in local and State government objectives, we have seen a significant increase in apartment buildings being constructed and entitled. There has been very little development of office, industrial, or retail buildings over the last 10 years as those projects cannot justify the high cost of land in this area. From 2019 to 2022, with cheap money, rising apartment rents, and some density bonuses, many apartment development projects moved full steam ahead. Still, with the increasing cost of capital, rising construction costs and softening rents, many projects that were previously entitled may not be built after all. As we hope for more housing in the South Coast, it is important to focus on the built and delivered unit count rather than the entitled count as each of these development projects include significant risk for the developer who is likely personally guaranteeing the construction loan.

Gene Deering is a Principal at Radius Commercial Real Estate.

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Sales Prices Still High

In mid-2020 we witnessed a new-tous phenomenon: the median sales price was higher than the median list price for the first time ever, and that trend continued every single month until January of this year. Both January and February we saw the median sales price dip below the median list price. But in March, the market picked back up and every month since, the sales price has exceeded the

list price, painting a picture of multiple offer situations and over-asking sales. Well-priced, appealing homes are still getting the attention of multiple buyers, but maybe not 15-20 like in the height of the pandemic.

If you omit Hope Ranch and Montecito from the data, the median sales price at the end of June was $1,750,000, compared to $1,950,000 one year ago. The average sold price including Hope Ranch and Montecito is $3,260,000, which, while high, is lower than last year. There has been one sale over $20M in Montecito this

This condo on Modoc sold in December 2019 for $1,050,000. It recently changed hands again in June for $1,550,000, with no significant remodeling. The price differential is indicative of the overall increase in property values the last few years. (listed by Kelly Mahan Herrick of Berkshire Hathaway)

year, compared to three in the same time period last year. There have also been 22 sales over the $10M mark in Montecito, Hope Ranch, the Mesa, and Carpinteria, compared to a whopping 25 sales over $10M last year by the end of Q2.

The higher-end sales remain strong, although days on market in that segment have slightly increased. The average DOM for the 23 sales over $10M this year is 80 days, compared to 66 days last year.

Condo Sales & Prices Down

Let’s look at condos: so far this year there have been just 138 sales in the

South County, compared to 206 last year by end of June. Active and new listings are down, while median and average sales prices are also down. The median sales price for condos is now $911K, compared to $950K this time last year. The median list price is still lower than the median sales price, reflecting a still active environment with multiple offers and bidding wars.

The number of days on market in the condo segment has increased to 32 days, which is more than double the 14 days we saw last year.

The luxury condo market is also Real Estate Snapshot Page 444

2023 Montecito YTD Real Estate Report Median Price Trend

This home on Shoreline is the highest priced sale in Santa Barbara this year, selling for $16.2M (listed by Riskin Partners of Village Properties)

The Flip Side Of Prop 19

by John J. Thyne III

Moving Your Property Tax Basis, Repeatedly

When California voters passed Proposition 19 in November of 2020, many questioned why the Real Estate industry supported a law that eviscerated the “parent to child exclusion” (from property tax reassessments) in most cases. Well, like the Stones’ “Satisfaction” and the Beatles’ “Revolution,” the B side of this new law outshined side A. While Prop 19 taketh away from intrafamilial hand-me-downs, it giveth to those wanting to move their existing tax basis, multiple times, from property to property, all around the state.

A historical perspective is helpful to appreciate this major change. Without getting too wonky, before Prop 19 we had Propositions 60 + 90 that allowed property owners to transfer an existing property tax basis, only once per couple and only after one of the spouses reaches age 55, and only for a principal residence, and only when downsizing, and only within the same county or one of 10 counties that allowed reciprocity. Santa Barbara County was the opposite of Hotel California, you could leave any time you wanted but you could never check in. These laws worked for those who had competent real estate counsel plus the right life circumstances, but many more were not ready to downsize at 55+ and wished they could take their tax basis with them on the way up where it mattered even more.

Enter the good side of Prop 19. Since April 1, 2021, property owners can now transfer their tax basis on a primary residence up to three times, all over the state of California, without restrictions on which county they leave or join. There are important limitations discussed below, but it is a tangible benefit you should explore if moving homes, even to new construction.

Enter the good side of Prop 19. Since April 1, 2021, property owners can now transfer their tax basis on a primary residence up to three times, all over the state of California, without restrictions on which county they leave or join.

In addition to now being able to transfer up to three times per couple, and anywhere in the state, homeowners are no longer limited to downsizing. You can take your current property tax basis to a more expensive home than the one you sold. This is new. This is big. But, there is a catch. Anything above the “equal value” (100% if buying before selling, 105% if buying in the first year after selling, and 110% if buying in the second year after selling), is now added to your tax basis. Still, pretty cool.

As ever, an example illustrates the point. In 2023, Harry and Harriett Homeowner sell their Montecito home that they bought in 1990 for $800,000 (for which they now pay $10,000 per year in property taxes). They sell it for $3,500,000 in order to move to a $5,000,000 mansion in Carmel. Before Prop 19’s effective date in April 2021, they would have lost their tax basis unless buying something within Santa Barbara County for equal to, or less than, $3,500,000. Now, however, they can buy a more expensive home and transfer their $10,000 tax basis for the first $3,500,000 (up to $3,850,000 depending on closing date) and then add about $1,500,000 to their valuation for a resulting property tax of approximately $25,000 per year on a $5,000,000 home.

The difference in property taxes for these happy Homeowners, compared to someone buying the same $5 million home without a tax basis transfer, is about $100,000 in property tax savings every four years. And, they (or you) can now do this twice more, in any county in California.

Before taking advantage of the historically high sales prices in today’s still surprisingly hot real estate market, be sure to meet with a competent real estate professional to identify potential property tax savings.

Catch you on the flip side!

2015-2022

John J. Thyne III is an attorney and senior partner of Thyne Taylor Fox Howard, LLP; a real estate broker who co-owns Goodwin & Thyne Properties; a licensed talent agent; and a professor of law.

Kevin Goodwin Natalie Goodwin

Caitlin Benson Targoni

PJ Williams Olesya Thyne

John J. Thyne III

Achok Majak

Cynthia Maez

Shanshan Lu

William Stonecipher Lisa Foley

Marcos Castro Marcus Boyle

Nicole Wesley John Thyne Jr.

Stuart Morse Jordan Robinson Angela Greenspan

was owned instead of leased. Residency at Alisal is attractive for downsizers, golfers, and anyone who wants to live a lifestyle with a tight-knit community, behind gates, and just minutes away from the amenities of the Alisal Guest Ranch. There are many former Montecito residents who live at the Ranch.

Currently on the market in Solvang are 15 condos, homes, and ranch properties. They range from a 2/2 Rosenberg Estates condo walking distance to downtown, to the exclusive Duck Club property, which is a hidden gem nestled between Brave & Maiden and Sunstone vineyards. Sitting on 25 acres, the property boasts a swim-able, 2-acre private lake for all your water recreation. The 5-bedroom, 6.5-bath home is exquisite, and features the highest level of finishes. The property is listed for $16.9M.

Los Olivos

The market has been quiet in Los Olivos, with only three sales the first half of the year, compared to 10 last year. The quaint, picturesque town is one of the most

coveted parts of the Valley, boasting a bustling downtown with many tasting rooms, award-winning eateries, beautiful boutiques, and a laid-back culture.

The most significant news out of Los Olivos this year is the opening of The Inn at Mattei’s Tavern as a luxury resort, managed by Auberge. The property is a former stagecoach stop of the 1800s, which once offered lodging for travelers making the trek between San Francisco and Los Angeles. Its storied past includes multiple owners and concepts, and now, the reopening earlier this year has brought more attention to Los Olivos and the Valley as a whole, cementing it as a vibrant vacation destination. The remodel has respected the original, historic charm of the property, but elevated the style and design. The Inn at Mattei’s Tavern offers 67 guest rooms, an upscale, saloon-style bar, several eateries, a pool, gym, and event space. The property caters to guests as well as locals, and there is a local membership available.

The three homes that have sold were priced between $1.5M and $3.1M, and all are within walking distance to the downtown district. There is currently just one home for sale in Los Olivos: a $2.9M, 20-acre equestrian estate.

Buellton

Charming and picturesque Buellton has had just 19 condo, PUD and single family home sales the first half of the year, which is down about 50% over a normal year. The lack of inventory is a symptom of several factors, including the increased interest rates, which is keeping sellers in their homes because they don’t want to trade in their current mortgage rate.

Sales this year range from a 2/1 condo on Central Avenue for $480K to a 1-acre

“The Duck Club” is the highest-priced home currently available in Solvang, sitting on 25 acres and featuring a private lake among other amenities (listed by Kate Campbell of Engel & Voelkers Santa Ynez)

This equestrian estate is currently the only active listing in Los Olivos (listed for $2,899,000 by Adam McKaig of Douglas Elliman)

This cute-as-abutton 3/2 on Park Street in Buellton sold in February for $860K (listed by Allan Jones of Santa Ynez Valley Real Estate)

The Inn at Mattei’s Tavern has reopened with a new concept and operator, making it a significant destination in Los Olivos (courtesy photo)

Real Estate Roundup Page 344

by Grace Neumann

What to Expect in 2023

The risk management challenges facing affluent families grow steadily more complex each year. Losses from extreme weather events and higher reinsurance costs continue to reduce the availability of coverage in higher-risk areas. Widespread natural catastrophes and economic turmoil will challenge affluent families in 2023. With rates rising in nearly all insurance lines and capacity reserved for only the best risks, affluent families need to get creative with their coverages, from seeking capacity in the excess markets to self-insuring their risk.

“Many homeowners are now turning to the California Fair Plan, but these policies have a total limit of $3M. Fortunately, there are now E&S markets that are willing to write over the California Fair Plan giving homeowners access to higher limits.”

Over the past two years, natural catastrophes cost U.S. insurers a record $176 billion – a figure likely to increase significantly with projected losses up to $53 billion from Hurricane Ian. As record losses accumulated over the last several years, multiple carriers stopped writing new policies in fire and flood prone areas or pulled out of markets entirely. State Farm General Insurance Company announced on May 26 that it will stop accepting new homeowners insurance applications in California. The

company cited “rapidly growing” catastrophe risks like wildfires, “historic increases” in construction costs, and a challenging reinsurance market.

Homeowners’ direct premiums written in California by excess and surplus (E&S markets) have almost tripled since 2018, rising in 2021 to $235 million. E&S markets or carriers are not bound by filed forms or rates and therefore have much greater flexibility to write and design policies to cover unique and specific risks, and to adjust premiums accordingly. These property policies will become the norm in high-catastrophe areas.

Homeowners at the top end of the market will need to assume more risk by implementing preventative measures to make their homes more insurable. In some cases, homeowners may need to self-insure a significant portion of their home’s value.

Many homeowners are now turning to the California Fair Plan, but these policies have a total limit of $3M. Fortunately, there are now E&S markets that are willing to write over the California Fair Plan giving homeowners access to higher limits.

Conducting insurance due diligence before purchasing a home will become paramount as more properties are deemed uninsurable. Here are some other considerations:

Check for overlooked coverage and credits: The devastation from wildfires will prompt carriers to add exclusions and conditions in property policies that could leave you underinsured. Have your broker review the sufficiency of policy limits and check for replacement costs, mold limitations, additional living expenses, flood and earthquake exclusions, and valuable articles deductibles.

Don’t forget about security: Investing in technology, services, and insurance together will enable you to develop a well-designed risk management plan, which can respond globally. Review security systems, add closed-circuit cameras, install back-up generators, and invest in site security. Don’t neglect to evaluate personal security, consider active cybersecurity management, travel evacuation plans, and even kidnap and ransom policies.

Grace Neumann rejoined HUB International in 2021 and has more than 30 years of experience in designing complex insurance needs for high-net-worth clients. She provides asset protection consultation and insurance services for affluent clientele in Santa Barbara/ Montecito, and throughout the United States.

property with two separate homes on it for $1,060,000. There were five condos sold in Vineyard Village, Buellton’s newest condo development, and a handful of homes sold in Thumbelina, Rancho De Maria, Flag Hill Estates, Meadow Ridge, and Oak Creek Estates. Interestingly, no homes have been sold in Sycamore Ranch, Buellton’s newest single-family home tract, although there are currently three listings there that have all been on the market well over 100 days.

Buellton is the Valley’s most popular town for commuters who work in Goleta or Santa Barbara. A quick jaunt down the Gaviota coast is an easy choice for buyers who find that their money goes so much further in Buellton and in the Valley in general. The town has a tightknit community feel, and has welcomed a handful of new eateries and wineries the last year.

Vega Vineyard & Farm is Buellton’s newest winery, offering wine tasting, a robust food menu from award-winning chefs, farm animals, a petting zoo, and more on its historic ranch on Santa Rosa Road. The property has been warmly welcomed by the community, and is packed every weekend. Also new to Buellton is Na Na Thai, an authentic Thai food restaurant owned by a couple who successfully hosted weekly Thai pop-ups at Bar Le Cote in Los Olivos for a year before taking the plunge to open their own eatery.

There are currently six homes and condos for sale in Buellton, ranging from a 2/2 condo on Central Avenue for $529K to $1,495,000 two-story home in Sycamore Ranch that offers a nearly 3,000-square-foot main house, full separate guest house, and casita.

Los Alamos

Considered to be on the north end of the Santa Ynez Valley, the chic, charming town of Los Alamos has had a strong first half of the year with nine real estate

Los Alamos best buy: 630 Main Street is a 3/3 farmhouse with garage and workshop, listed for $1,295,000 (listed by Laura Drammer of Berkshire Hathaway HomeServices California Properties)

sales. Last year that number was seven sales, with a whopping 18 sales in 2021! Los Alamos is also somewhat of a commuter community, with close proximity to wine country, Santa Maria, and San Luis Obispo.

Sales in Los Alamos ranged from a 2/1 fixer for $450K to a spacious home on St. Joseph Street that closed for $1,445,000. Current listings include six homes ranging in price from $995K to $9.9M. The latter is set on Foxen Canyon Road on 575 acres, affording buyers privacy and space.

One of the best buys in the Valley right now is in Los Alamos: 630 Main Street, which is listed for $1,295,000. It’s a gorgeous farmhouse on a picturesque street, with a large garage and workshop that has potential for an ADU. The .23-acre property is just a quick walk to downtown Los Alamos, with its charming shops, award-winning eateries, and coveted small-town feel. Los Alamos offers close proximity to wine country, Santa Maria, and San Luis Obispo, and has recently become a destination for winemakers, who have taken advantage of the lower price points.

Kelly Mahan Herrick, also a licensed realtor with Berkshire Hathaway Home Services, has been editor at large for the Journal since 2007, reporting on news in Montecito and beyond.

Vega Vineyard & Farm is Buellton’s newest winery, and has been warmly welcomed by the community

3050 Via Rancheros Road, Santa Ynez Valley

$17,900,000

A remarkable 71+/- acre ranch in the heart of the Santa Ynez Valley, featuring 3 Residences, 4 Apartments, 4 Barns, riding arena, round pen, 25 acres of pastures, 2 stocked ponds, and the ultimate in privacy and security. Located gracefully along the Santa Ynez River and nestled at the foot of the Santa Ynez Mountain range, this ranch offers an in-town private nature sanctuary that feels light years away yet is just minutes from all the best restaurants, shops, and wineries. Thisa extraordinary property is set up to accommodate a variety of equestrian disciplines, yet could easily accommodate a vineyard or other pursuits.

The estate’s elegant 8500 sf Spanish hacienda-style home recently underwent an extensive renovation and features 5 en-suite bedrooms, luxurious and spacious rooms, hand-hewn quarter sawn French oak floors, and five fireplaces. The home is surrounded by professionally designed gardens, mature specimen trees, and extensive entertaining areas including a 14’ covered patio, luxurious pool, fire pit, orchard, and vegetable gardens. Starlink high speed internet is throughout, and the property is served by 39 kWh solar array (57mWh in 2022).

With over a ½ mile of river frontage, this property is a nature lover’s paradise: Hiking, nature walks, riding trails, and natural swimming holes are at your doorstep. A truly spectacular ranch that cannot be duplicated.

805-689-6262 | carey@clkre.com

Power of Privacy

by Gabe Saglie

Private Clubs Add to Santa Barbara’s Residential Appeal

The pandemic is now solidly in the rear-view mirror. But one of its unexpected silver linings – a surging allure to living along Santa Barbara’s South Coast – roars on. An enclave like Montecito is not all that far from the urban sprawl of Los Angeles, but as so many new residents and visitors now know, it is a world away.

Living in this treasured corner of the world, though, is about more than whether you can afford it, or the way it guarantees that your investment will grow. It’s about the way that it offers so much more than you thought you needed, the way it never ceases to delight, and the way it manages to enhance everyday life, every day.

The private clubs that call communities like Montecito and Santa Barbara home have a lot to do with that appeal. At their core, they are havens for socialization, that all-important tenet of human interaction that, as another truth revealed by the pandemic, a community both needs and craves. They also expand their members’ horizons, through a bevy of innovative programs and curated experiences that range from the culinary and athletic to the imaginative and intellectual.

“For the majority of our clients, private clubs are definitely an amenity that they’re looking for,” says Natalie Grubb, a realtor with Village Properties’ Grubb Campbell Group, and a resident of Santa Barbara for pretty much her entire life. “We’ll ask them, ‘What do you like? Tennis? Golf? Sailing?’ And we can tell them, ‘Yes, that exists here.’” Clubs tend not to make dues and fees public. For serious prospects, though, it’s fair to say that membership is more an investment than an expense.

Coral Casino Beach & Cabana Club

CinemaScope screen and concession area. The state-of-the-art fitness facility features Peloton machines and private training.

The 25,000-square-foot pool complex has two lap pools, a kids’ pool, a whirlpool, and bar service. Members can host special events, like weddings, in the ballroom, with its 12 Baccarat crystal chandeliers, or on the sprawling 20,000-square-foot Great Lawn. Fine dining is available in the clubhouse, which also features a library and wine rooms, and is helmed by chef Robin Nishizaki, who joined the Club in 2022. “I change the menus at least four times a year with the seasons,” he says. “Sourcing local ingredients is an important factor when changing a menu or creating a special menu for wine dinners, beer dinners, or other special events. Creating a balance between vegan dishes, seafood, and traditional fare is an important focus also.” montecitoclub1918.com

The Valley Club of Montecito

Opened in 1929, the Valley Club features a deluxe 18-hole, par-72 golf course. Designed like an hourglass and measuring just over 6,600 yards, the course, along with bunkers, have undergone extensive renovation after the 2018 mudslides. Other amenities include tennis courts and prime onsite dining. The clubhouse features a living room and inner courtyard. Elegance and privacy rank high here, as well as a strict dress code for anyone ages 12 and up. valleyclub.org

Miramar Club

Privacy and exclusivity reign supreme here, the members-only extension of the luxurious and elegant Rosewood Miramar Resort. Launched in May 2019, the Club also enjoys a right-on-the-sand location and exclusive seasonal and regional menus crafted by executive chef Massimo Falsini. The dining room touts an extensive private wine cellar, and members have access to top-line athletic facilities, as well as personalized concierge services. clubmiramar.com.

Birnam Wood

The famous private club right on Butterfly Beach is part of Ty Warner Hotels & Resorts. Built in 1937, it was purchased by Ty Warner in 2000, in conjunction with his buy of the historic Biltmore hotel across the street. Both properties, shuttered in 2020 due to the coronavirus pandemic, remain closed, although Mr. Warner has suggested that the Coral Casino will reopen this year, following the completion of various renovations – the first in some 15 years. They include a new rooftop lounge; retractable doors and windows in the private dining room; and expansion of the Fins juice bar. It was just announced that Tydes, the Club’s oceanfront eatery, will become available to the public. coralcasinoclub.com.

The Montecito Club

One of the premier golf clubs in the area is part of Ty Warner Hotels & Resorts, which means members get exclusive access and discounts at luxe sister resorts like the San Ysidro Ranch, the Four Seasons New York, and Las Ventanas al Paraiso in Los Cabos. The 100-yearold Spanish-style property reopened in 2019, following a $119 million renovation.

The par-71 Jack Nicklaus Signature Course was designed around the property’s natural undulating elevation and boasts sweeping views of the Santa Ynez Mountains and the Pacific Ocean. There’s a bowling alley and arcade in the all-ages clubhouse known as The Hideout, as well as a 20-seat Dolby Atmos movie theater with a 16-foot

There are more than 140 private homes inside this exclusive, gated property along East Valley Road, the oldest ones dating back to the early 1970s. Membership to the Birnam Wood Golf Club gives access to the par-70 course, which was designed by Robert Trent Jones, Sr., opened in 1968, and features Bermuda grass. The clubhouse hosts rotating members-only social events, like summer barbecues and movie nights, as well as daily gourmet dining options. Guest cottages are available for members’ guests, which come with full Club access. There are tennis and pickleball courts here, too, as well as bocce ball and a state-of-the-art fitness center. bwgc.net.

Knowlwood Tennis Club

Located in the heart of Montecito, this club for tennis lovers dates back to 1970, set on what was the late 19th-century estate of the Knowles family. The programs are family oriented, with a bevy of private and group lessons for kids as young as four, and they’re open to non-members, too, though at higher pricing. The club features 10 courts, including two clay courts, as well as a swimming pool, and is owned and operated by its members. Membership numbers are capped, with spots only becoming available when a family opts out. knowlwood.club

The Santa Barbara Club

The oldest social club in Santa Barbara is probably the oldest private hangout of its kind between L.A. and San Francisco. Founded in 1892, the Santa Barbara Club Power

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features a clubhouse that holds both state and local historic landmark status and that has hosted distinguished community members and guests for decades.

“Our members are not trust-funders, but academics,” says club manager Linda Spann, who adds that the waiting list for membership, which is by invitation only, has grown so big that the club’s initiation fee recently went up.

There are three tiers of membership here, based on age: Regular (45+), Intermediate (31-44), and Junior (21-30). The foodie offerings have long been a calling card of the Santa Barbara Club; Chef Humberto Perez has helmed the kitchen for more than 20 years and makes everything from pastas to pastries in-house.

“We can serve more than a hundred meals on a Friday night,” adds Spann, which are served either in the elegant Dining Room or the sprawling outdoor lawn.

Members have access to various interest groups, including a Breakfast Club, an Investors Club, and a Wine Group. The Club’s Preservation Foundation allows members to make tax deductible donations to preserve the Clubhouse and other landmark buildings in town. The Club’s Art Foundation aims to support contemporary artists by featuring their work through displays and exhibits. There are dozens of reciprocal clubs across the U.S., as well as globally, in countries like England, Mexico, and Thailand. santabarbaraclub.org

The University Club of Santa Barbara

This has been a premier social club in the heart of Santa Barbara since 1919. Networking reigns supreme here, via an ongoing schedule of themed parties, mixers, and lectures, including large affairs during major community events like Fiesta. The club hosts various social clubs, too, like the Book Club and regular wine tastings.

The property offers members free prime downtown parking, and the manicured gardens feature secluded patios and a firepit. There’s a pool table in the game room, and the club regularly puts works by local artists on exhibit. The club’s executive chef and culinary team have received high marks from discerning foodies for decades. Members also get access to more than 200 reciprocal clubs around the U.S. and the world.

The University Club requires prospective members to have attended, or be currently enrolled in, an accredited college or university; non-grads of higher education must show that they have distinguished themselves in their community. Sponsorship by at least two current members is also required. There are four membership categories: Junior (ages 21 to 39), Resident (living within 25 miles of the Club), Non-Resident (living beyond 25 miles), and Social, which features a lower initiation fee. uclubsb.org

The Club & Guest House at UC Santa Barbara

This unique club in the heart of the UCSB campus was established in 1968 and is known as the “living room” of the UCSB campus. The Guest House, which was renovated in 2014 and features ocean views, emulates a 34-room boutique hotel. Stays are reserved for visiting scholars, families of students, and those on university business, as well as members. The dining room, while closed for lunch during the summer months, focuses on locally and sustainably sourced food, and it’s open to the public. The Club is applying for a new beer and wine license, which will allow it to bring back its quarterly members-only winemaker dinners; in the past, they’ve featured premium Santa Barbara producers like Foxen, Longoria and Sweetzer. The facility is governed by a Board of Directors. theclub.ucsb.edu.

The Santa Barbara Polo and Racquet Club

Polo pros from all over the world, including the royal variety, trot to this destination club, one of the oldest of its kind in the U.S. It features the country’s longest polo season, too, with games hosted seasonally from May through mid-October. Games are

free to the general public on Fridays, while Sunday games require tickets. Polo memberships come with exclusive dibs on mid-level and upper boxes, for prime viewing.

The club also operates its own polo school, the Santa Barbara Polo Training Center. The social membership option comes with complimentary attendance at weekend polo matches, as well as invitations to special events throughout the year. Tennis memberships, which come with access to the club’s eight courts, six of which are lit, and swim-and-fitness memberships feature use of the heated pool, jacuzzi, and fitness center, which features yoga and fitness classes.

Dining has received new focus, with the 2021 launch of the Fieldside Grill, which is open to the public every Wednesday for lunch and every Thursday through Saturday for lunch and dinner. “We felt that because of our members and the condos on the grounds and the community around us, establishing a full-scale restaurant would be a welcome addition,” says general manager David Sigman. “And the food is as awesome as the views.” sbpolo.com.

La Cumbre Country Club

Set on the outer edges of Hope Ranch, La Cumbre Country Club dates back to 1916. It would go on to close for 10 years after World War II, due to waning mem-

bership, but it has remained an exclusive haven ever since its reopening in 1957. The 150 shady acres feature a celebrated 18-hole golf course designed by George Thomas, with various uphill and downhill targets, as well as six championship tennis courts, an aquatics area, and a new fitness center. The social offerings range from card games and tournaments to seasonal parties. Lunch and dinner are offered, including at several outdoor settings; Sunday champagne buffets have long been popular. The club features golf, tennis, and social memberships. lacumbrecc.org

Santa Barbara Yacht Club

It’s all about preserving maritime tradition at this club, which, founded in 1872, is the second oldest yacht club on the West Coast. Set right on the Santa Barbara Harbor, this is a popular spot on Wet Wednesdays, when dozens of boats take part in several races. Kite boarding draws crowds on Fridays. Food and beverage services are available, including the popular Monday Luncheon Forum, which draws members and their invited guests. Club members are also stewards of the Breakwater Flag Project, which showcases the flags of many of Santa Barbara’s nonprofit groups, and run the Santa Barbara Youth Sailing Foundation to teach seamanship to budding sailors. Membership is by invitation, and prospective members need to be active boaters. sbyc.org

Santa Barbara Tennis Club

Open since 1971, this sports club features 12 tennis courts and various training sessions for adults and juniors. There’s an aquatics program, too, with a 25-yard regulation pool that’s kept at 82 degrees year-round, and a 10-person jacuzzi. The fitness center features yoga and Pilates studios, and the café caters various events throughout the year. The cardio room features Star Trac equipment, and there’s a new Pilates and yoga studio. This club offers family, single, and junior memberships, though there is a longstanding waitlist. santabarbaratennisclub.com .

Gabe Saglie has been covering the Santa Barbara wine scene for more than 15 years through columns, TV, and radio. He’s a senior editor with Travelzoo and is a leading expert on travel deals, tips, and trends.

Angeles’ Beverly Park but with ocean views. The community here also includes tennis, swimming and there are 18 rarely available homes at The Ennisbrook Casitas and Clubhouse, which are 2,700ish to 3,500ish square foot homes on smaller lots with their own shared pool and clubhouse, all within the larger Ennisbrook community. These Casitas usually sell in the mid $3’s to high $4mil’s. Homes at Ennisbrook are within the Montecito Union School District.

Birnam Wood

Guard gated, golf, tennis, and the Montecito Union School District all in one. Birnam Wood is a members-only residential golf community and country club, where by purchasing a home in the neighborhood, one is also joining the country club and becoming part of the Birnam Wood community. Homes here have been shooting through the roof recently (prices, that is). Homes in Birnam Wood, once outside the gates, are just a few blocks to the Upper Village.

The Upper Village / The Golden Quadrangle

The boundaries of the long referenced Golden Quadrangle are most commonly agreed to be (from what I have gathered) from Park Lane in the east to Hot Springs Road in the west. From East Valley Road to the south to East Mountain Drive/Oak Creek Canyon and the San Ysidro Ranch in the north. Many larger homes on larger lots dominate these streets, with Picacho Lane being the premier address, I would argue (going toe to toe with East Mountain Drive), where sales over $10 million are the norm and highs in the $40s and $50mil range have been recently paid for celebrity-owned compounds on Picacho. Homes in the Golden Quadrangle are within the Montecito Union School District and surround the Upper Village. There are a sprinkling of condos, townhomes, and cottages that come on the market from time to time. These fetch a premium and serve as entry-level access points to the Upper Village.

412 Crocker Sperry Drive – $12,300,000 – Designer’s own creation with pool, privacy, and a minimalist design, emphasizing natural light, simplicity, clean lines, and details inside and out that emphasize color, texture, and shape.

1800 East Mountain Drive – $6,450,000 – Gated, ocean view contemporary compound with two impressive architectural structures on 1.4+ creekside acres, adjacent to the San Ysidro Ranch.

Central Montecito

I would define Central Montecito (as I don’t know what else to call the homes around MUS that are not necessarily Upper Village and are not Hedgerows), as Central Montecito (open to ideas). I’m talking about streets like Schoolhouse Road, upper Santa Rosa Lane, mid San Ysidro Road, Cota Lane, and others that make up this area of lovely, pricey, and conveniently located homes.

The Hedgerows

Homes and hedges, just blocks from the Rosewood at Miramar Beach. Some homes boast 10- and 15-foot-tall hedges, surrounding lovely botanic properties that rest just north of the 101 and often just a few blocks from the beach. Mostly level lots define this area, as do quaint streets, lanes, and historic properties peppered here and there, some dating back to the late 1800s that have been lovingly restored. Very popular area being close to MUS and the beach at Miramar.

The Beach

The beach area/neighborhood is basically everything on the ocean side of the 101 freeway from the edge of Summerland/Sheffield Drive in the east to Santa Barbara’s famed East Beach to the west, though multiple mini communities exist within (Fernald, Miramar, Butterfly, Hammond’s, Edgecliff, etc.). The beach area in Montecito is unique in that one can own a small studio or two-bedroom condo with ocean views for $2mil to $6mil (both communities offer tennis, pool, etc.). Or one can own a smaller cottage home right on the water ($5 to $12mil) or a home on two or three acres (yes those do exist and yes they are expensive). All homes, condos, townhouses, and cottages in Montecito’s Beach area are within the Montecito Union School District. Real Estates

Montecito Farmhouse Modern Integrity.

301 San Ysidro Road – $7,750,000 – Striking contemporary home by architect John Kelly, down a long lane near Montecito Union School. Bocce court and mountain views in a private setting.

175 Miramar Avenue – $8,000,000 – This iconic George Washington Smith designed home is on a lovely, less travelled lane just blocks from the beach. Step back in time to 1929, while enjoying the upgrades and improvements that have been done to the home in recent years.

Middle Road / Lower Village

I am including the Montecito Oaks neighborhood based on proximity to Coast Village Road, but Montecito Oaks is certainly its own neighborhood in its own right (known also as the Trick or Treat neighborhood). Just a block west from the Oaks we have homes, condos, and estates for those who like to be just a block or few from the shopping and dining along Coast Village Road and also be near the beach. This would include, for the most part, the homes at Montecito Oaks and those on Olive Mill Road in the east and below Hot Springs Road as it runs from Casa Dorinda (high-end retirement digs) along toward Montecito’s Country Mart in the west and down to the 101 freeway.

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Pepper Hill

Resting just above the Lower Village are the homes of Pepper Hill, offering close-tothe-beach views from a rolling hills elevation. While there is often some traffic heard from the 101, these homes offer great views, a close-to-everything location, and the feeling of a private enclave (how long until Pepper Hill is gated?). Lots here tend to be at least one acre +/- and homes have been selling in recent years from the $5+/-mil to $10+/-mil range, but there are a few in the area that would go for more if put on the market. Street names include Woodley and Glenview and most homes in the area are in the Cold Spring School District.

Sycamore Canyon

Sycamore Canyon is a road that stretches from the top of Middle Road and connects most of Central Montecito to the Cold Spring and Eucalyptus Hill areas, to the northwest portion of Montecito. Along Sycamore Canyon (and Camino Viejo Road) are small lanes with homes priced from around $4mil to $10mil and beyond. A few multi-acre and larger estates would command more if they were put on the market.

There are currently no homes for sale in the Sycamore Canyon area.

Cold Spring School Neighborhood

This focus is on the neighborhood and properties in and around Cold Spring School, Westmont College, and Lotusland. Smaller and low traffic neighborhood streets (Chelham,

256 Butterfly Lane – $3,995,000 – Three bedroom, two bathroom “Carmel cottage” with upside potential on a nearly 1/3rd-acre lot, on a shared private drive near Middle Road and the Lower Village and within the Montecito Union School District.

390 Woodley Road – $5,750,000 – 4,200+ square-foot Mediterranean home on over an acre with mountain views in the Cold Spring School District.

1330 Plaza Pacifica – $3,999,000 – Two bedroom, 2.5 bathroom remodeled two-story ocean view condo. 24-hour, gate-guarded community. Amenities include pool, tennis, parking, elevator to unit from garage, etc.

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Investment properties

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strong: so far this year we’ve seen the sale of around 20 luxury condos in Montecito and Santa Barbara.

Montecito Sales Slow

Thus far in Montecito, we’ve seen the sale of 61 homes and condos in the MUS and Cold Spring School districts. In 2022, that number was more than double at 103. In 2021, that number was 174, and in 2020, it was 116. Sales ranged from a 2/2 condo at 1220 Coast Village Road to a $22M estate on San Ysidro Road.

Median sold price in Montecito for the first half of the year is $5.2M, which is the same as last year. Average Sold price is $6.9M, on par with the previous year as well. The first half of the year there were 14 sales over the $10M mark, compared to 16 in 2022 and 22 sales in the same timeframe in 2021. Notable sales include 2692 Sycamore Canyon Road which closed for $14.3M after being on and off the market for years; a remodeled home on Middle Road that sold off-market for $8.3M after closing for $3.4M just four years earlier; and 723 Via Manana, which sold for $5M after 242 days on the market.

The first half of the year we saw the sale of 9 condos in Montecito, ranging in price from $1.345M to $5.7M. Last year there were 20 sales the first half of the year. Average number of days on market for these sales is 19, which is less than half of last year’s 47 days. Sales included units at Bonnymede, Montecito Shores, El Montecito Verde, and units in both the Upper and Lower villages.

Fewer Goleta Sales

Goleta has seen impressive sales and prices in the last few years. This year, the average sales price at the end of Q2 was $1.46M, which is on par to last year’s average sales price and well above the previous year’s $1.28M. There have been 137 condo and home sales in Goleta thus far in 2023.

Last year there were 43 homes that sold over the $2M mark in Goleta; this year there have been 21. Both the median and average home prices are above the median and average list prices, which is impressive, and shows that Goleta remains a popular area to purchase real estate. The values in Goleta remain elevated due to the inclusion of properties in San Antonio Creek, Park Highlands, the Boulders, Shadow Hills, and others.

The lowest-priced property to trade hands this year in Goleta was a 1/1 Encina Royale condo that closed for $515K in June. The highest priced property was a 5-bedroom, 6-bath estate in Park Highlands, which closed for $5M in in June after about a month on the market.

What’s Really Happening Out There

Interest rates continue to be an important factor in our market, especially under the $2M price point. Last year around this time we had many buyers drop out of the market due to their decreased purchasing power because of the increased interest rates. This led to fewer frenzied multiple buyer situations, which shortened the gap between list price and sale price. As mentioned, earlier this year we saw two months – January and February – where the median sales price was lower than the median list price. This was a sort of sweet spot in the market where buyers who were still active had an opportunity to make a go at homes that maybe had been on the market for a while, were over-priced, or had motivated sellers.

In March, and every month since then, we’ve been back to the phenomenon of having a higher sales price than the median list price. While there are still frenzied situations where multiple buyers are bidding the prices up, there are still fewer buyers in the marketplace. Pricing correctly is still incredibly important, and homes that are appealing will still sell with a few offers, or more.

We’ve seen a normalization of price reductions; in the heart of the pandemic it would be rare to see more than one or two properties on the “price reduced” list each morning. Now, we are seeing a small handful of those price reductions as a daily

This home on Jelinda Drive in Ennisbrook sold for $18M in April, making it the second highest-priced sale in Montecito so far this year (listed by Calcagno & Hamilton Group of Berkshire Hathaway)

This home on East Mountain Drive sold off-market in June for $11.4M (listed by Cristal Clarke of Berkshire Hathaway)

An oceanfront end unit at Bonnymede sold in May with a 10-day escrow period. It closed for $5.7M after being listed for $4,995,000. It was the highest-price condo sale in Montecito so far this year. (listed by Lisa Foley of Goodwin & Thyne)

This estate on Via Los Padres was the highest-priced sale thus far this year in Goleta; it closed for $5M in June (listed by Glick Real Estate Associates of Berkshire Hathaway)

MARK ASHTON HUNT

Representing Buyers and Sellers in Montecito

Specializing in property valuation

If you would like me to make an appointment for you to view any home for sale in Montecito, or for a current market analysis of your home, please contact me directly.

Call/Text Mark @ 805-698-2174

Mark@Villagesite.com

www.MontecitoBestBuys.com

DRE#01460852

Riven Rock

Also within the Cold Spring School District is the area known as Riven Rock, where homes rest on the site of a once historic property, since broken up and turned into a neighborhood. Signature hedged lanes, low traffic, medium to larger estates dominate. Stone walls line the neighborhood and a pride of ownership is obvious as you drive or walk through the area. This is where our Royals reside.

There are currently no homes for sale in the Riven Rock area.

Eucalyptus Hill

Connecting the Cold Spring area to the views along Alston Road, with the city, beaches, and entertainment of Santa Barbara just around the corner to the west, Eucalyptus Hill homes are coveted for their location and views. Rolling foothills commanding vistas and historic properties abound, with home prices from around $4mil up to $20mil and above for a multi-acre, historic estate property. Homes in this neighborhood may be in either the Cold Spring or Cleveland school districts.

I do hope this tour has given you a glimpse into the feel and advantages of each Montecito neighborhood. As for area home sales, June 2023 was on point, with 14 sales recorded in the MLS (perhaps off a bit from normal years), but there was a number of properties changing hands behind the scenes, off market as it were. Strong prices still proving to be the norm. Fixers that four years ago were in the $2.5’s now sell for the $4.5’s. The price of entry gets steeper and steeper. Happy Summer ahead and keep Montecito friendly!

Paso Robles, etc.) with smaller homes rest at the foot of larger homes and significant estates along East Mountain Drive, Cold Spring Road, Ashley Road, and others.

733 Knapp Drive – $9,975,000 – Mediterranean compound with a main house/villa, pool, bocce court, grounds, gardens, and privacy as well as a guest cottage, all on 1.2+/- acres in the Cold Spring School District.

Mark and his wife, Sheela Hunt, are real estate agents. His family goes back nearly 100 years in Santa Barbara. Mark’s grandparents – Bill and Elsie Hunt – were Santa Barbara real estate brokers for 25 years.

251 Cloydon Circle – $2,295,000 – Single-story two bedroom, two bathroom, 1938 California cottage in original condition on a 10,000+ square-foot lot near Cold Spring School. Lowest priced single-family residence on the market in Montecito.

Mortgage Matters

by Matt Genovese

Asset Rich, “Qualified Income” Poor

More and more we see clients that are asset rich yet “qualified income” poor, which just means that they have done a good job saving and accumulating wealth, and now live off their accumulated wealth and investments. The definition of “qualified income” specifically pertains to a calculation based off their tax returns as reported usable annual income per banking guidelines. Keep in mind there are several ways to create additional income outside of what your tax returns show with products like Structured Distribution or Asset Allocation loans. These loans specifically take asset accounts and allow for a calculation that yield additional monthly income that can be used to qualify.

“ Another great solution for clients to buy homes without having a high level of qualified income is to utilize products like the Departing Residence option”

Another great solution for clients to buy homes without having a high level of qualified income is to utilize products like the Departing Residence option. These loans can help leverage a clients existing home and the equity in that home to purchase a new home prior to selling the existing home. There are specific details and guidelines each of the above loan options requires, but they are far too detailed to explain in this piece. Trust that if your Mortgage Advisor is not aware or capable of using these products, then they simply are selling around them and it’s time to find a new advisor. Lastly, we can always find private investors to help bridge the gap; they are the most expensive options, but also the most convenient and swift closing in just 7-10 days. At the end of the day, there are still several great solutions for those who have been told they don’t qualify.

occurrence and it’s a reminder that the market is normalizing. Average homes – those that are not updated, or maybe they have a design or location flaw that makes them less appealing – are tending to sit longer on the market, especially if they are not priced accurately initially.

All that being said, this market still has a lot of buyers eager to get into a home, and many whom are

not affected by the interest rates. It is still a tough time to be a buyer, as the inventory is still historically low. Buyers should be ready to submit a strong, realistic offer when they see a home they love, preferably with a pre-approval letter from a local lender already in hand, or with a proof of funds if they are paying cash.

It’s expected that interest rates will come down in the next 1.5 years.

SOUTH SANTA BARBARA COUNTY

When that happens, we can expect that the number of buyers in our marketplace will increase, which could make it even harder for buyers to buy a home. However, if the interest rates decrease, it could also entice sellers – who will also need to buy – to put their homes on the market. While there are many layers that add to the complexity of the real estate market, when it comes down to supply, Santa Barbara and surrounding areas will continue to experience low inventory levels.

QUARTERLY REPORT

Matt Genovese, of MG Lending, was born in Orange, California, and is a graduate of the University of Oregon with degrees in Sociology and Business. His experience spans across several professional categories, from national and international account management to capital fundraising, mortgage lending, and finance.

PHARMACY OWNER. SANTA BARBARA POLICE OFFICER. DANISH TV STAR. ACTUALLY.

STORY BY JEFF WING

In far-off 1984, a restless young man with an interestingly European two-stroke name – Keld Hove – emigrated from his native Denmark to the United States with a hundred dollars in his pocket. Today, Hove is both a Santa Barbara police officer and a bona fide star on a hit Danish TV show called –you guessed it –And what, dear reader, is Keld Hove’s role in Barbara. This Dane has completed a glowing full circle his 19-year-old self could scarcely have foreseen.

For the rest of the story go to:

by Dr. Dylan Minor

Montecito Real Estate within a Strategic Wealth Plan

“Buy land, they’re not making it anymore.” - Mark Twain

Over the long run, Montecito real estate has been an excellent investment. Indeed, price growth has averaged about 8% per annum over the past five years versus 7% for the greater Santa Barbara area and 6% nationally. These price premiums of Santa Barbara and Montecito real estate have even persisted over the past five decades. Further, if you would have rented your Montecito property, total returns would have approached 12%, the same as for large U.S. stocks over the same period.

Although Montecito real estate has generated attractive long-run returns, there have been some periods where property values fell significantly, and it took over a decade to recover the losses (e.g., after the global financial crisis). As such, it is important to appropriately integrate real estate into an overall strategic wealth plan. While Montecito real estate lost significant value over a decade, U.S. equities almost doubled in value during the same period of time. However, earlier in the 21st century, for the first decade, U.S. equities lost value while our local real estate had grown in value by 50%.

Instead of trying to choose next decade’s winner, we can instead combine assets in a smart way, not only to offset some risk, but also to generate more overall return than the investments can generate on their own. For example, it is possible to take two 8% returning investments and combine them in such a way to generate an overall portfolio return of 10% per annum. The key is to properly integrate assets into an overall strategic wealth plan. To do so, we recommend focusing on three dimensions of your assets:

The first dimension is maximizing the current yield of any asset. For real estate, this means deriving the greatest total current benefit from an asset. To do so it is important to track all forms of value: in addition to cash flow (e.g., renting a property, at least part of the year), there can be tax benefits (e.g., using part of the property for a business venture), philanthropic benefits (e.g., using the property to host charitable events), and the benefit of joyfully living in a property that is how and where you would like it to be (i.e., this joy-value can be calculated by asking yourself what’s the most you would pay per year to live in your Montecito home). The grand total of all of these benefits forms the total current yield of your property. The strategic part then becomes identifying the right mix of these different kinds of payoffs across all of your assets, based on your own desires and needs.

The second dimension is minimizing the economic sensitivity of your current yield from each asset. For example, some current rental income can be invested to provide a return two years later. Thus, if rental income is lackluster in two years due to an economic slowdown, this future independent investment return can help offset that. It turns out that there are many economic factors: inflation, interest rates, economic growth, to name just a few. The key is to orchestrate all of one’s assets and liabilities to maximize your financial well-being regardless of what these factors happen to be for a given period. For example, while real estate can be a good inflation hedge (after all, its costs comprise 33% of the Consumer Price Index), private floating rate funds and certain hedge funds can better help minimize interest risk. A clever mix of these assets and others can help provide consistent benefits over time, regardless of economic factors.

The third dimension is minding the remainder. Any assets that you do not use up will ultimately be given to your family, charity, and the government (via taxes and fees). There are many things that can be done today to ensure your remainder is divided between those three in the way you best see fit.

In summary, Montecito real estate is, in many ways, an excellent asset to own. However, it can be made even better by integrating it into a strategic wealth plan through maximizing its total current yield, minimizing its value dependence on any particular economic outcome, and minding the remainder.

Data for this article are obtained from the Federal Reserve Bank of St. Louis, U.S. Federal Housing Finance Agency, U.S. Bureau of Labor Statistics, Zillow, and author’s calculations.

Dr. Dylan Minor is the Chief Strategist and founder of Omega Financial Group in Santa Barbara. He has held professorships at Northwestern University and Harvard University. Currently, he is faculty at the Anderson School of Management (UCLA) and Columbia University. He can be reached at dr-minor@omegafingroup.com.

Reverse Mortgages

by Jeannette Macias

The Evolution of Reverse Mortgages

Agreat deal has happened since the late 1960s when the first reverse mortgage was issued to a high school teacher by one of her former students. Back then, what began as privately issued reverse mortgage loans ultimately became insured by the Federal Housing Authority in the 1980s and gradually saw the birth of proprietary “JUMBO” reverse mortgages.

So, what changed since then? Briefly, the needs and circumstances of certain homeowners created the demand for loan products that could help homeowners with high-valued homes. Also, the industry saw a demand for reverse mortgages for those who were not yet 62 years old but were over the age of 55.

Let us review some of the basics: A reverse mortgage helps homeowners over the age of 62 convert a portion of their home equity into tax free cash and offers the additional benefit of being able to choose how to access those funds. For example, homeowners may choose a growing line of credit, have monthly payments made to them, withdraw a lump sum, or a combination of all three plans. All this without having to make a monthly mortgage payment and being able to continue to retain complete ownership of their own home.

Homeowners have asked me in the past what is the main difference between the federally insured reverse mortgage loan known as the Home Equity Conversion Mortgage vs. the Reverse Mortgage proprietary loans?

The short answer is that the HECM, while being insured by the federal government, has higher closing costs and a lending limit of $1,089,300, whereas the JUMBO Reverse Mortgages closing costs tend to be less while offering access to more home equity with a loan amount up to $4,000,000. Plus, they offer unique financial solutions not available with the FHA Reverse Mortgage.

Remember the interest rates of 2022? In a historic first, we saw loan rates as low as 2.3% and many people refinanced their home loans to take advantage of these once in a lifetime rates. Imagine that you are one of those individuals who had one of those loans and now have a need to tap into your home equity but want to keep your low interest rate on your first mortgage.

A relatively new proprietary JUMBO reverse mortgage available today may allow you to retain the low interest rate first loan you currently have and place a “reverse mortgage second” on your home that does not require monthly payments!

A step further, what if there was another loan that would allow you to lower your monthly mortgage payments and after 10 years become a reverse mortgage? There is a program for that, too!

Lastly, homeowners may use a HECM or JUMBO reverse mortgage to purchase a new home! Ideal program if you’re downsizing or would like to relocate.

California residents are one of the few groups in the country where home values can be higher than $1,500,000 in some markets, therefore making the JUMBO reverse mortgage a very attractive option to consider in your retirement years.

“JUMBO Reverse Mortgages closing costs tend to be less while offering access to more home equity with a loan amount up to $4,000,000.”

Jeannette, who works with Lazerus Properties and Capital, provides product knowledge to help you decide if a reverse mortgage is an option to consider.