The California drought has been gaining attention for quite some time now, and cities across the Golden State have been working to save water and eliminate waste. Santa Barbara and Montecito have been taking drastic measures to ration and conserve water, gaining national attention for the cities’ success. The Santa Barbara News-Press’ Sara Bush recently reported on the success of the Montecito Water District’s water rationing ordinance. Below is a synopsis of Bush’s article.
The Montecito Water District (MWD) enacted an ordinance earlier this year to force customers to cut back on water use by 30% or face fines. After receiving information about the severity of the drought and a few tips on how to save water, educated customers went above and beyond the call, with 80% bringing their water usage to or below their allocations in May, and 84% (!) below the allocation in April. Many believe Montecitians will simply write a check to pay a fine, in order to keep their rolling lawns lush, but experts were astounded by the efforts residents were putting in.
The MWD’s Thomas Mosby has been contacted by major national news outlets such as CBS and NBC to discuss the strategy which has garnered so much success in such a small timeframe. Mr. Mosby advises people to read their water meters every two or three days, and avoid leaving properties (and irrigation systems!) unattended for long periods of time.
Village Properties is the exclusive Christie’s International Real Estate affiliate in the Santa Barbara market. Recently, Christie’s CEO Bonnie Stone Sellers spoke to the New York Times about the future of the powerhouse company, and how it’s success is driven by the success of the affiliates.
Ms. Sellers is the chief executive of Christie’s International Real Estate, the New York-based division of the auction houseChristie’s. The company has 138 real estate affiliates in 45 countries, including Brown Harris Stevens.
Before joining Christie’s in September 2012, she served as the head of the real estate group at McKinsey & Company, where she was a partner for 14 years.
Interview conducted and condensed by VIVIAN MARINO
Q. How does the New York market factor into the overall business at Christie’s International?
A. There isn’t any one affiliate that is that major a factor, but New York is a very important location for us. A lot of our major transactions are in the New York market. Since I’ve been with Christie’s International Real Estate, our network’s biggest transaction in New York City was through our affiliate Brown Harris Stevens: an $88 million apartment at 15 Central Park West bought by a Russian oligarch in 2012.
Q. Have you added affiliates since you came to the helm?
A. We’ve added 18 affiliates, some of which are in really key areas — from Singapore to Dubai; Monaco; Orange County, Calif.; Honolulu, just to name a few.
As a result of this and as a result of the strength of the luxury market, our growth has been substantial.
Q. How so?
A. In 2013, we had a sales volume of $106 billion. That reflected a 29 percent growth over the previous year of about $82 billion.
Q. What is your forecast for this year?
A. We’re looking for a bigger number.
Q. Your company recently published its second annual study of the global luxury market. Any surprises?
A. The big surprise for us was the velocity of sales. We had no idea that the growth in the luxury market was related to the volume of sales, in particular, rather than the increase of prices. The second big “aha!” to us in our research — and we do all the research ourselves, by the way — was that luxury real estate has no relationship to general housing. It bears a very close relationship to luxury goods, particularly fine art. And if you look at how well the auction house did this past year, it kind of proves the point. Many have multiple pieces of art, and multiple homes.
Q. Are there just more rich people around?
A. There are a lot more rich people, and the rich people have more wealth — this had been in many public reports. But to us, we see three groups driving this.
The first group that everyone hears about is the foreigners. They invest in London and the United States and they do that to have a safe place for their capital, a place where they can eventually live when they want to send their children to school; a place that has ease of access — a lifestyle city.
A second group are the millennials. This is a generation that for the first time is receiving money from their baby-boomer parents or perhaps they were in the tech area and they’ve earned their own money. They’re becoming a noticeable force in the market.
But the third group — the real driver — is the locals. And this is not just focused on New York but all the major cities we’ve looked at. The locals were on the sidelines during the recession and they’ve now come back with their pent-up demand and they’re fueling the growth of the lowest end of the luxury market — $1 million to $5 million — because finances are available and they have confidence.
Q. In the New York market, $1 million isn’t really considered luxury.
A. We actually agree with you. In the New York market, we define luxury as $5 million and above. But for our network globally, we only handle properties starting at $1 million.
Q. So if I wanted to list a home for under $1 million, you wouldn’t market it?
A. Our affiliates may take it, but not under the Christie’s network.
Q. Are you working directly with any big developments?
A. You caught us just before we announced the business — we’re going to be launching it this summer.
One of the new initiatives this year is to create a business in development project marketing. We have three projects under our belt already. The one we are about to launch is in Sardinia; we also have two projects in London.
Q. Where would you like to see the company in the next few years?
A. We have some bold aspirations in the next five to 10 years. First: geographic expansion. We need to be in every major luxury city in the world, and there are still a few that we haven’t yet tackled. There are several in Asia that we’re testing the waters on right now — for example, Tokyo.
I’d like to deepen synergies with the auction house. This year we had the opportunity to market and sell the properties of Huguette Clark. She died, a copper heiress, with four properties in the New York area — three on Fifth Avenue, sold together with our affiliate Brown Harris Stevens — and one in Connecticut. In addition, we sold a lot of the art in the homes, jewelry and in the most recent auction, the Monet “Water Lilies.” So it came full circle: the art and the real estate together. It was a perfect synergy.
Home and lifestyle mogul Martha Stewart recently made a trip to sunny Santa Barbara to experience one of the area’s most charming offerings – the daily farmer’s market. Popping up six days a week throughout Santa Barbara County, local farmers, growers and culinary artisans converge to offer the best of the area’s local harvest. Martha spent a Santa Barbara morning perusing the market, delighting in multi-colored carrots, okra, bounties of berries, freshly baked artisan breads and fromage accompaniments and a plethora of other eye-catching and mouthwatering finds. In Montecito, the Friday spot to do your farmer’s market shopping, the market travels along scenic Coast Village Road, sprouting in front of iconic Montecito eatery, Jeanine’s Bakery one week and in the Montecito Country Mart the next. On Tuesday afternoons, several blocks of Santa Barbara‘s famous State Street shut down to traffic so locals and visitors can mix and mingle in the market. On a warm summer afternoon, break from the market to pop into one of the shops or restaurants on either side of the street for a refreshing glass of local sangria or to find a unique Santa Barbara treasure.
Santa Barbara’s top real estate team, Riskin Associates of Village Properties Realtors, exclusively affiliated with Christie’s International Real Estate, was the listing agent for the highest priced residential sale of 2014 thus far. Commanding a list price of $28,000,000 the approx. 3-acre Fernald Point property included 300+/- feet of sandy beach frontage and coastal views spanning from Carpinteria to the Santa Barbara Harbor. The property closed escrow in late April, marking the beginning of a market pick up in the high end.
Luxury real estate markets in major metropolitan areas such as Los Angeles, New York and London have been booming for a few years now. “During that time the high end market in Santa Barbara and Montecito was relatively slow. Recently, we’ve seen a nice pick up in sales over $7M” says Riskin Associates Partner Dina Landi, “But we still have a lot of inventory.”
The staggering sale on Fernald Point contributes to Riskin Associates’ impressive sales total, so far this year the team has closed over $70 million dollars in luxury real estate transactions. On top of their closed 2014 transactions, the team has a number of additional high-end properties currently in escrow, ranging from $7,950,000 to $14,900,000. This recent shift in the market has the team at their busiest since 2012, when they totaled over $225 million in sales for the year.
Their unique team approach allows Riskin Associates partner’s Rebecca Riskin, Sarah Kelly and Dina Landi to always be available. “During a hot market, working as a team allows us to maintain an unparalleled level of service, with attention to every detail and anticipation of every client’s need” says Rebecca. Clients appreciate the team’s intimate involvement with every aspect of a transaction.
If you simply do not have the good fortune of calling Montecito or Santa Barbara “home” year-round, purchasing a vacation property to lure you to this casually luxurious, coastal paradise as often as possible is the next best thing. Recently, Zillow released an article detailing a number of ways to protect your second home when you are not there to enjoy it. Below, Riskin Associates tailors these steps to the Montecito/Santa Barbara area for an quick and informative read.
Homeowners Insurance Policies:
- The policy on your primary residence may not cover all of the personal property in your second home. While many standard policies will cover a portion of the belongings, it is important to check with your provider as to the extent of that coverage.
- Taking out a mortgage on your second home will likely require you to purchase a second homeowners insurance policy. Be sure that this policy is covering a vacation home, as unique risks of such properties should be outlined and covered. Below are a number of these unique risks.
- Oceanfront parcels are undoubtedly a desirable location for a vacation home. However, close frequent hurricanes can often cause flooding, which is usually not covered by your insurance policy. Fortunately, Montecito and Santa Barbara do not experience tropical storms with any regularity. However, the Santa Ynez Mountains are literally in the backyards of many Montecito estates while fires do not present danger frequently, fire insurance is highly encouraged.
- Earthquake concerns do tend to come up for many out of the area buyers. Earth quakes do happen occasionally in the southern California area, earthquake insurance is another option for homeowners to protect themselves and their properties. Riskin Associates provides buyers with an in depth booklet detailing the risks of earthquake damage and the many ways to protect your home.
- Vacation homes are often left vacant for much of year. This can leave homeowners at risk for unnoticed electrical fire, pipe flooding or theft. Renting your home to tenants during your absence is a great way to ensure your property is cared for. Another way to protect your home is to ensure that your insurance coverage lines up with the current replacement cost of your home. Finally, have a professional inspect the major systems in your home (plumbing, electrical etc.) to ensure that these systems are up to date and in good condition.
- Should you decide to lease your home to tenants to avoid leaving it vacant, there are a number of precautions to take. Homeowners insurance may cover incidentals and personal injury of tenants if you rent out your home only occasionally and for short periods of time, if you plan to rent your home for longer than four weeks, consider landlords insurance to cover a wide range of circumstances. Also, take the extra steps to conduct background checks on potential tenants, draft lease agreements or purchase an umbrella insurance policy.
Owning a vacation property in Montecito or Santa Barbara offers a lifetime of memories with family and friends in one of the west coast’s most coveted locales. If you are purchasing a home in the area for the first time, working with a team of real estate agents who hold an intimate understanding of this niche market is crucial, particularly when navigating the myriad of intricacies vacation homes can present.