Meghan Markle and Prince Harry bought a $10 million home. Housing market trends suggest they couldn't have timed the purchase worse.
Well, Meghan Markle and Prince Harry finally moved off Tyler Perry’s couch. The “Hollywood Royals” became homeowners a week ago after closing on a quaint $10 million house in Montecito’s luxury housing market.
Evidently disenchanted with Los Angeles, the Sussexes moved roughly 100 miles north, where they intend to put down roots in an elite community populated by celebrity homeowners like Oprah Winfrey, Ariana Grande, and Ellen DeGeneres.
Video: Harry and Meghan become homeowners in Santa Barbara.
Details on the purchase remain slim, though TMZ sources claim it’s a “secure, gated estate.” Royal insiders say Prince Charles helped foot the bill.
One thing’s for sure: Given housing market trends, Meghan and Harry picked a foolish time to buy a home.
New data from the National Association of Realtors (NAR) shows that the median existing single-family home price rose 4.2% annually during the second quarter.
An evaporating supply coupled with raging demand is driving price growth at the national level. On-the-ground reporting suggests that’s true of the Santa Barbara County area too.
Renee Grubb, owner of the Montecito-based real estate firm Village Properties, told the Santa Barbara News-Press that the local housing market boom is “completely shocking.”
“We are seeing jaw-dropping numbers and showings and they really started spiking in June,” Grubb said. “I can remember a time where in Montecito, there was inventory in the market that would take two years to sell, and now, I am quoting you just a bit over three months.”
Grubb gave that interview in mid-July – right around the time Meghan Markle and Prince Harry moved into their new home.
While buyers are diving into bidding wars with reckless abandon, many economists expect prices are about to fall for the first time in nearly a decade.
CoreLogic’s latest forecast anticipated that home prices would essentially flatline in July – then suffer a 1% price decline at the national level over the following year.
The outlook varies across individual markets, but Zillow’s Home Value Index suggests Prince Harry and Meghan Markle’s new hometown won’t be immune to the downturn.
Zillow predicts Montecito home values will dive 2.2% over the next 12 months, slightly more than the 1.5% decline faced by the wider Santa Maria-Santa Barbara metro area.
In other words, most house-hunters would be better off waiting for the housing market’s temperature to cool.
Obviously, Meghan and Harry aren’t most house-hunters. Nor are they living in a median home.
It’s always possible Meghan and Harry scooped up the deal of a lifetime, but they aren’t known for pinching pennies. And Montecito isn’t known for its bargains.
The median home in the Santa Barbara County community is worth a cool $3.3 million. And the Sussexes spent three times that.
Video: This is what $10 million gets you in the Montecito housing market.
A $10 million budget gets you a lot – even in a luxury housing market like Montecito. As an example, this $9.9 million Montecito home is a 5,216 sq. foot “sanctuary” on three “panoramic acres.” It features five bedrooms, six bathrooms, and a “resort-like pool and pool house.”
Assuming Zillow’s home value forecast is accurate, Meghan and Harry’s new pad will depreciate by $220,000 over the next 12 months.
That’s not a great way to begin your foray into financial independence.
According to a Telegraph source, the timing of the purchase wasn’t about money at all. It was about Archie:
They have thought about this carefully and researched it well. This is the place where they plan to be happy, make good friends and bring up Archie, giving him the chance to play with other children his age.
It’s hard to put a price on that. And it must be nice to be in a financial position where you don’t have to.