Mudslides ravage California coastal town
(Bloomberg) — The mudslides on the California coastal town of Montecito have devastated a wealthy enclave where billionaires including Charlie Munger, Eric Schmidt and Oprah Winfrey own properties, with hundreds of millions of dollars of damage in one of America’s most expensive real estate markets.
Sixty-five single-family homes were destroyed and 462 damaged by the flooding and mudslides that struck the city Tuesday after the first winter storm to hit the region, said Amber Anderson, a spokeswoman for Santa Barbara County. Seventeen people have died and five were missing as of early Friday.
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While much of the damage was to relatively modest homes, the catastrophe hit an area known as a retreat for Hollywood celebrities and wealthy executives. Country clubs and homes capped with Mediterranean red-tile roofs are nestled between the Santa Ynez Mountains and white-sand beaches of the Pacific Ocean.
The median listing price of a house in Montecito was $4.1 million as of late last year, according to Zillow. Among the prominent properties is Sea Meadow, a gated beach community developed by Berkshire Hathaway Inc. Vice Chairman Munger and locally known as “Mungerville.”
Montecito, a 90-minute drive from Los Angeles, has long been popular with the wealthy. Charlie Chaplin was among the investors who built the Montecito Inn in 1928 as an upscale getaway for Hollywood stars. And a century later, down the road from Mungerville, Los Angeles developer Rick Caruso this summer will be opening what he says is Southern California’s only five-star resort on the beach. The site wasn’t damaged in the mudslides.
The rains and flooding struck the community after it had just escaped relatively unscathed from the largest wildfire in modern California history, which raged through the region last month. The Thomas Fire burned the vegetation on the mountains above Montecito, causing a torrent of exposed soil and debris to wash down on the houses below when heavy rains hit. The 17 deaths hit particularly hard in a tight-knit town of about 9,000 people.
“What is devastating is that we lost so many lives,” Winfrey said Thursday on the talk show of Ellen DeGeneres, also a resident of Montecito. “It’s such a tiny, little community and nobody would have expected that after we survived the fires that we would have this devastation with the mudslides so soon.”
300-foot wide stream of mud
She described how some of her neighbors had to be rescued from their roofs and that their houses were “just gone” after a 300-foot wide stream of mud ripped through them.
Actor Jeff Bridges’ home was among those caught up in the mudslides.
“Our home has been severely damaged, but we are safe, and so thankful for that and for the first responders who are working tirelessly to save people,” Bridges said in a Twitter post.
Berkshire’s Munger didn’t respond to a request for comment sent to an assistant on any damage to his property.
Among the fatalities is Rebecca Riskin, a Montecito real estate agent who worked for a number of celebrities.
“She was an icon among other Realtors,” said Mark Lomas, an agent with Sotheby’s International Realty. “We’re a small community and everybody knows everybody. Most people are kind of in shock.”
Damage from the mudslides could conservatively be in the hundreds of millions of dollars, said Ralph McLaughlin, chief economist with real estate website Trulia.
Homeowners with earthquake insurance may be covered for damage from the mudslide, but many people in the area may not have this kind of insurance, which can be expensive, according to McLaughlin.
Although the “double whammy” of the fires and the mudslides may have some short-term impact on the local real estate market, McLaughlin expects there to be no-long term repercussions because of the natural appeal of the area for the wealthy.
“Santa Barbara is an extremely nice place with a fantastic climate and world-class beaches,” McLaughlin said. “Those with money will rebuild and continue to want to live there.”
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