Category Archives: Real Estate

Foreclosure Starts Rise in 43% of US Markets

Counter to the national trend, several housing markets saw foreclosure starts rise year over year last month, according to a new report from ATTOM Data Solutions, a real estate data firm.

Forty-three percent of local markets saw an annual increase in May in foreclosure starts. Foreclosure starts were most on the rise in Houston, which saw a 153 percent jump from a year ago. Hurricane Harvey struck the Houston metro area in August 2017, tying with Hurricane Katrina as the costliest tropical cyclone on record, and has contributed to many recent foreclosures in the area. Other areas that are seeing foreclosure starts rise: Dallas-Fort Worth (up 46% year over year); Los Angeles (up 14 percent); Atlanta (up 7 percent); and Miami (up 4 percent).

A total of 33,623 U.S. properties started the foreclosure process in May, which is down 6 percent from a year ago. But a number of states—23 states and the District of Columbia—posted a year-over-year increase in foreclosure starts in May.

Overall, the metro areas with the highest foreclosure rates in May were: Flint, Mich.; Atlantic City, N.J.; Trenton, N.J.; Philadelphia; and Columbia, S.C.

View the chart below to see foreclosure starts by metro area.

May 2018 Foreclosure Starts by Metro

Source: Realtor Magazine

 

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The Federal Reserve Bank of Chicago Has A New Plan to Tax Illinoisans Fleeing Pension Liabilities

An audible gasp went out in the breakout room I was in at last month’s pension event cosponsored by The Civic Federation and the Federal Reserve Bank of Chicago. That was when a speaker from the Chicago Fed proposed levying, across the state and in addition to current property taxes, a special property assessment they estimate would be about 1% of actual property value each year for 30 years.

Evidently, that wasn’t reality-shock enough. This week the Chicago Fed published that proposal formally. It’s linked here.

It surely ranks among the most blatantly inhumane and foolish ideas we’ve seen yet.

Homeowners with houses worth $250,000 would pay an additional $2,500 per year in property taxes, those with homes worth $500,000 would pay an additional $5,000, and those with homes worth $1 million would pay an additional $10,000.

Is the Chicago Fed blind to human consequences? Confiscatory property tax rates have already robbed hundreds of thousands, maybe millions, of Illinois families of their home equity — probably the lion’s share of whatever wealth they had.

Property taxes in many Illinois communities already exceed 3%, 4% and even 5% of home values. Across Illinois, the average is a sky-high 2.67 percent, the highest in the nation.

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In south Cook County they already average over 5%. Most of those communities are working class, often African-American. The Fed says maybe you could make the tax progressive by exempting lower values, but that’s very difficult to do and, if you did somehow exempt the poor and working class, the bill pushed to the others would be astronomical.

Those rates have already plunged many communities into death spirals, demanding an immediate solution, but the Chicago Fed apparently wants to pour on more of the accelerant.

Don’t they understand that people won’t build on or improve property when property taxes are that high? When taxes are 3 percent to 6 percent, any value you add to your home is going to be taxed at that high rate forever. Have they never been to our communities with countless dis-repaired, abandoned homes and commercial properties, which are the result?

Get this, which is part of the Fed’s reasoning: “New taxes wouldn’t affect people thinking of moving to Illinois. While they would have to pay higher property taxes, that would be offset by not having to pay as much for their new homes. In addition, current homeowners would not be able to avoid the new tax by selling their homes and moving because home prices should reflect the new tax burden quickly.”

In other words, just confiscate wealth from current owners because they will pay, whether they stay or not, through an immediate reduction in home value.

This proposed tax would only address the five state pensions. What about the other 650-plus pensions in Illinois, particularly those for overlapping jurisdictions in Chicago which are grossly underfunded? The Fed was asked that at last month’s seminar and they, without explanation, said they didn’t bother to cover that.

I’ve earlier met Rick Mattoon, one of the Chicago Fed authors of the proposal. He’s a smart, likeable guy who I thought had lots of interesting information. For the life of me, however, I can’t understand how he would put his name on this proposal.

Real Property can’t leave, so seize more of it. That’s the basic idea.

Source: By Mark Glennon | Wirepoints

Retail Rents Plunge 20% Across Manhattan

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As we anticipated earlier this year, the first the signs of the coming implosion of the US real-estate bubble are emerging in the high end of the nation’s most overcrowded and expensive housing markets (Manhattan and San Francisco are two salient examples). 

And in the latest confirmation of this trend, the Wall Street Journal published a report this week highlighting how the business environment for commercial landlords in New York City’s most densely populated borough is growing increasingly dire, as landlords who had left storefronts vacant in the hope of courting the next Bank of America or CVS have inadvertently turned trendy downtown Manhattan neighborhoods like SoHo into a “shopping wasteland”.

Thanks in large part to their intransigence, commercial landlords who catered to retail tenants are being hit twice as hard as they otherwise would’ve been, as tenants, no longer able to afford rents higher than $600 per square foot, are now demanding concessions and rent reductions, a phenomenon that has seen average rents in certain neighborhoods plummet on a year-over-year basis.

According to CBRE Group, a real estate services firm that pays close attention to commercial rents in Manhattan, some of the hardest-hit neighborhoods are also some of the borough’s most trendy, including the Meatpacking District, and SoHo.

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Here’s an excerpt from the WSJ story, entitled “Retail Rents Plunge in Major Manhattan Shopping Districts”.

The average asking rent on Washington Street between 14th and Gansevoort streets in the Meatpacking District dropped to $490 a square foot from last year’s $623, a 21.3% decrease and the largest percentage drop in asking rents among the shopping corridors CBRE tracks.

Average asking rents tumbled 18.1% on both SoHo’s Broadway Avenue and the Upper East Side’s Third Avenue, where asking rents were $556 and $280 a square foot, respectively.

Availability remained flat compared with last year, with 209 ground-floor spaces marketed for direct leasing. The report noted, however, that landlords looking to directly lease space also will have to compete with sublease space, which has increased according to anecdotal reports. Some space available for sublease comes as retailers leave behind old quarters for better locations, Ms. LaRusso said.

Conditions are favorable for tenants, said Andrew Goldberg, vice chairman at CBRE. Landlords are more open to shorter-term leases and provisions allowing tenants to get out of leases if a retail concept doesn’t work.

“I think we will start to see some more of the savvier tenants of companies realize we’re starting to get to a point where they can drive some good deals for themselves,” Mr. Goldberg said.

The problem when rents enter free-fall territory is that it’s a self-reinforcing phenomenon (not unlike the blowup that triggered the demise of the XIV, but over a much longer period of time). As rents fall, retailers start wondering if they can procure a better deal, possibly in a better neighborhood. All of a sudden, landlords must now essentially compete with themselves as the number of subleases climbs.

Of course, Manhattan is Manhattan. There will always be hoards of boutique merchants, big-name brands and – well, Walgreens – clamoring for commercial rental space. 

But after nearly a decade of soaring real-estate valuations, it appears one of America’s hottest housing markets is heading for a “gully.”

On the other end of the property market, a drop in valuations and transaction volumes has inspired some observers to proclaim that “this is the breaking point.”

In short, we wish the Kushner Cos the best of luck as they prepare to buy out the remaining stake in 666 Fifth Ave. Because overpaying for commercial real-estate in Manhattan in 2018, nine years into one of the longest economic expansions on record sounds like a fantastic plan.

Source: ZeroHedge

Real Estate Outperforms Amid Broader Selloff

Summary

  • Amid rising trade and political tensions, US equities dipped nearly 6% this week, the worst weekly performance in two years. REITs fell 5% while home builders declined 3%.
  • A flurry of headlines reignited volatility this week including a Fed rate hike, retaliatory tariffs from China, a major data breach at Facebook, and a $1.3 trillion spending bill.
  • Investors are increasingly anxious that protectionism threatens to upend the best period of global economic growth in a decade. Real estate sectors are relatively immune from these negative effects.
  • Yield-sensitive equity sectors, including REITs and home builders, have outperformed during the past month as interest rates and inflation expectations have retreated.
  • The effects of tax reform and rising mortgage rates are beginning to impact housing markets. Existing home sales are higher by just 1% as first-time buyers remain on the sidelines.

Real Estate Weekly Review

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2017 was a year of remarkable tranquility in financial markets, but 2018 has been quite the opposite. After going an entire year without a 2% weekly move, the S&P 500 (SPY) has recorded eight such weekly moves through the first twelve weeks of 2018. This week, volatility was reignited by a flurry of headlines centering around US trade policy, a political “data breach” at Facebook (NASDAQ:FB), a “hawkish hike” by the Federal Reserve, and a $1.3 trillion spending bill.

This week, the S&P 500 (SPY) dipped nearly 6%, which was the worst week for US stocks in more than two years. Investors are increasingly anxious that rising protectionism threatens to upend the best period of global economic growth in a decade. Others, however, remain confident that the Trump administration’s hard-line stance on trade is a negotiating tactic that will inevitably result in lower overall trade barriers. Real estate sectors are relatively immune from these effects. REITs (VNQ and IYR) and home builders (XHB and ITB) outperformed this week, dropping 5% and 3%, respectively. Yield-sensitive equity sectors, including REITs and home builders, have outperformed over the past month as interest rates and inflation expectations retreated.

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(Hoya Capital Real Estate, Performance as of 4pm Friday)

The 10-Year Yield ended the week 2bps lower at 2.83% after climbing to 2.90% following the Federal Reserve’s “hawkish hike.” The Fed hiked short-term rates by 25bps, as expected, but compared to the last meeting, more Fed officials now expect four rate hikes in 2018. Since inflation remains relatively subdued, investors fear that a rate-hike plan this aggressive may be unnecessarily restrictive and slow the US economy, indicated by the flattening yield curve.

Across other areas of the real estate sector, mortgage REITs (REM) declined by nearly 4% while international real estate (VNQI) fell roughly 3%. Within the Equity Income categories, we note the performance and current income yield of the Utilities, Telecom, Consumer Staples, Financials, and Energy. Within the Fixed Income categories, we look at Short-, Medium-, and Long-Term Treasuries, as well as Investment Grade and High Yield Corporates, Municipal Bonds, and Global Bonds.

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Cell towers, manufactured housing, malls, self-storage were the best performing sectors of the week. Winners this week included Washington Prime (WPG), Crown Castle (CCI), SBA Communications (SBAC), Tanger (SKT), American Homes (AMH), and Taubman (TCO). Growth REIT sectors including hotels, office, and industrials were among the weakest-performing. DiamondRock (DRH), Brandywine (BDN), Pebblebrook (PEB), and QTS (QTS) each dropped more than 9% this week.

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REITs are now lower by nearly 12% YTD, under performing the 4% rise in the S&P 500. Home builders are off by 11%. REITs remain more than 20% off their all-time highs in 2016. The 10-Year Yield has climbed 43 basis points since the start of the year.

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REITs ended 2017 with a total return of roughly 5%, lower than the 20-year average annual return of 12%. Going forward, absent continued cap-rate compression, it is reasonable to expect REITs to return an average of 6-8% per year with an annual standard deviation averaging 5-15%. This risk/return profile is roughly in line with large-cap US equities.

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Real Estate Economic Data

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(Hoya Capital Real Estate, HousingWire)

New and Existing Home Sales Continue to Be Soft

Last week, we analyzed February housing starts data, which indicated that housing construction activity has slowed in recent quarters, dragged down by a sustained pullback in multifamily building. Single-family construction remains relatively solid, but rising mortgage rates and changes to the tax code threaten to stall the plodding housing recovery. Total housing starts have grown just 2.0% over the past twelve months, the slowest rate of growth since 2011.

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This week, new and existing home sales data was released. Both new and existing home sales were strong in early 2017 but faded into year-end, likely due to rising mortgage rates, unaffordability issues, and continued tight supply levels. Existing homes were sold at a 5.54m seasonally adjusted annualized rate in February, slightly missing expectations. Existing sales have risen just 1% over the past year, the weakest rate of growth since early 2015.

New homes were sold at a 618k rate, which was roughly in line with expectations after upward revisions to past months. New home sales, which are primarily comprised of single-family homes, have been the relative bright spot, growing 7.5% on a TTM basis. This rate of growth, however, is also the second slowest since early 2015.

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At roughly 600k per year, the rate of new home sales remains well below pre-recession levels and remains low by historical standards. The period between 1970 and 2000 saw an average of 650k home sales per year while the average population during that time was 30-40% below current levels. The rate of existing home sales, however, remains relatively healthy. At around 7% per year, the turnover rate of existing homes is roughly in line with pre-2000 levels. A number of factors have contributed to the “wide bottom” in new single-family housing construction: the lingering effects of overbuilding in the run-up to the housing bubble, a generational shift to renting, restrictive zoning restrictions, and lower investment returns from home building.

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Existing home inventory remains near historically low levels, primarily a result of this “wide bottom” in new single-family housing construction. Existing housing supply was just 3.4 months in February, down from 3.8 months in February 2017. Other effects are at play, too, including the increased institutional presence in the single-family rental markets and the rising rate of home ownership among the older demographics. First-time home buyers made up 29% of total existing home sales, down from the 32% in February 2017. The rate of first-time home buyers remains stubbornly below the pre-bubble level of 40-45% and the bubble-peak of 52%. We have yet to see the younger demographics enter the home ownership markets in any significant numbers.

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Real Estate Earnings Update

Last week, we published our Real Estate Earnings Review for 4Q17. Earnings season concluded last week in the real estate sector. Overall, 4Q17 results were slightly better than expected (80% beat or met estimates), but REITs raised caution heading into 2018. As supply growth has intensified, fundamentals continue to moderate across the real estate sector as rental markets approach supply/demand equilibrium after nearly a decade of above-trend rent growth. Same-store NOI grew 2.6% in 2017, the slowest rate of growth since 2011. Occupancy levels remain near record highs, however, as real estate demand growth continues to be robust.

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Bottom Line

Amid rising trade and political tensions, US equities dipped nearly 6% this week, the worst weekly performance in two years. REITs fell 5% while home builders declined 3%. A flurry of headlines reignited volatility this week including a Fed rate hike, retaliatory tariffs from China, a major data breach at Facebook, and a $1.3 trillion spending bill. Investors are increasingly anxious that protectionism threatens to upend the best period of global economic growth in a decade. Real estate sectors are relatively immune from these negative effects.

Yield-sensitive equity sectors, including REITs and home builders, have outperformed during the past month as interest rates and inflation expectations have retreated. The effects of tax reform and rising mortgage rates are beginning to impact housing markets. Existing home sales are higher by just 1% as first-time buyers remain on the sidelines.

Last week, we published our quarterly update on the cell tower sector: Cell Tower REITs Shrug Off SpaceX Launch. Cell towers were the best performing REIT sector in 2017. After strong 4Q17 earnings results, cell towers remain the lone REIT sector in positive territory so far in 2018. The enormous spectacle of the SpaceX launch and the grand ambitions of Elon Musk to launch a competing satellite-based internet service temporarily jolted investor confidence in the sector. Despite potential competition from small-cells and satellite, macro towers continue to be the most economical way to provide comprehensive coverage. The risk of technological obsolescence is often overstated. Positive catalysts are on the horizon for 2018.

We also published our quarterly update on the industrial sector: Industrial REITs: Only A Trade War Can Spoil The Good Times. Over the past five years, industrial REITs have emerged as the hottest real estate sector. Booming global trade and the growth of e-commerce have boosted demand for warehouse distribution space. While supply growth has picked up in recent years, markets remain tight. Occupancy is near record highs, rent growth is relentless, and demand indicators suggest that there’s further room to run. Fears of a “trade war” have escalated after the US enacted tariffs on steel and aluminum imports. Uncertainty over trade policy could disrupt supply chains and weaken industrial REIT fundamentals.

 

So far, we have updated up REIT Rankings on the Industrial, Single Family Rental, Cell Tower, Apartment, Net Lease, Data Center, Mall, Manufactured Housing, Student Housing, and Storage sectors. We will continue our updates over the coming weeks.

Please add your comments if you have additional insight or opinions. We encourage readers to follow our Seeking Alpha page (click “Follow” at the top) to continue to stay up to date on our REIT rankings, weekly recaps, and analysis on the real estate and income sectors.

Source: Hoya Capital Real Estate | Seeking Alpha

First Real Estate Deal Transacted In Ethereum Closes In The United States

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Look how fast things happen!! 

Just about a month or so ago, many agents where laughing about Bitcoin, blockchain, and other cryptocurrencies, talking about how people won’t use it to buy real estate. Hmmm… 

Where did this transaction happen? 

In Burlington, Vermont. 

The first property to be sold this way in the United States. 

It was sold entirely through the blockchain. Completely. 

Ethereum was the token used. This puts Vermont on the map. 

Propy is a company in San Francisco. Propy handled the entire transaction including recording of the documents and contracts instead of using the city system. 

Vermont is the first state to allow this kind of transaction and soon coming up are Colorado and Arizona. 

The encryption technology in blockchain is the best available at this time. 

This transaction used cryptocurrency for the purchase and it was then turned into the fiat money on the other end. 

The first Bitcoin to Bitcoin transaction in the United States was when Michael Komaransky sold his Miami mansion for 455 Bitcoin which was the most expensive Bitcoin real estate transaction to date. 

While most people will still not do a cryptocurrency real estate transaction, it is here, and it will be here to stay. 

The different tokens will fail and others will rise. Ethereum is very stable. Blockchain is here to stay and evolve. 

Source: By Katerina Gasset | Active Rain

Fire Sale Begins: Chinese Conglomerate HNA Starts Liquidating Billions In US Real Estate


Yesterday ZeroHedge
explained that one of the reasons why Deutsche Bank stock had tumbled to the lowest level since 2016, is because its top shareholder, China’s largest and most distressed conglomerate, HNA Group, had reportedly defaulted on a wealth management product sold on Phoenix Finance according to the local press reports. While HNA’s critical liquidity troubles have been duly noted here and have been widely known, the fact that the company was on the verge (or beyond) of default, and would be forced to liquidate its assets imminently, is what sparked the selling cascade in Deutsche Bank shares, as investors scrambled to frontrun the selling of the German lender which is one of HNA’s biggest investments.

Now, one day later, we find that while Deutsche Bank may be spared for now – if not for long – billions in US real estate will not be, and in a scene right out of the Wall Street movie Margin Call, HNA has decided to be if not smartest, nor cheat, it will be the first, and has begun its firesale of US properties.

According to Bloomberg, HNA is marketing commercial properties in New York, Chicago, San Francisco and Minneapolis valued at a total of $4 billion as the indebted Chinese conglomerate seeks to stave off a liquidity crunch. The marketing document lists six office properties that are 94.1% leased, and one New York hotel, the 165-room Cassa, with a total value of $4 billion.

One of the flagship properties on the block is the landmark office building at 245 Park Ave., according to a marketing document seen by Bloomberg.

https://www.zerohedge.com/sites/default/files/inline-images/245%20park.jpg?itok=o04ldvfo245 Park Avenue, New York

HNA bought that skyscraper less than a year ago for $2.21 billion, one of the highest prices ever paid for a New York office building. The company also is looking to sell 850 Third Ave. in Manhattan and 123 Mission St. in San Francisco, according to the document. The properties are being marketed by an affiliate of brokerage HFF.

This is just the beginning as HNA’s massive debt load – which if recent Chinese reports are accurate the company has started defaulting on – is driving the company to sell assets worldwide.

According to Real Capital Analytics estimates, HNA owns more than $14 billion in real estate properties globally. The problem is that the company has a lot more more debt. As of the end of June, HNA had 185.2 billion yuan ($29.3 billion) of short-term debt — more than its cash and earnings can cover. The company’s total debt is nearly 600 billion yuan or just under US$100 billion. Which means that the HNA fire sale is just beginning, and once the company sells the liquid real estate, it will move on to everything else, including its stake in all these companies, whose shares it has already pledged as collateral.

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So keep a close eye on Deutsche Bank stock: while HNA may have promised John Cryan it won’t sell any time soon but companies tend to quickly change their mind when bankruptcy court beckons.

Finally, the far bigger question is whether the launch of HNA’s firesale will present a tipping point in the US commercial (or residential) real estate market. After all, when what until recently was one of the biggest marginal buyers becomes a seller, it’s usually time to get out and wait for the bottom.

Source: ZeroHedge

 

‘Extreme’ Rainfall on Thomas Fire Burn Areas Created Deadly Montecito Debris Flows

 

The disaster in Montecito was a rare event, statistically speaking – but it could happen again, geologists say

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A boulder field surrounds a Montecito home after the Jan. 9 storm that triggered deadly flooding and debris flows. (Mike Eliason / Santa Barbara County Fire Department photo)

The surging river of mud and boulders that engulfed swaths of Montecito from the mountains to the sea last week, killing 20, was a rare disaster – so rare, geologists say, that it may happen only once in a few hundred to a thousand years at that location.

But that doesn’t mean it couldn’t happen again this winter, said Ed Keller, a professor of earth science at UC Santa Barbara.

All of the communities below the scorched slopes of the Thomas Fire are at risk, he said.

“These areas are very vulnerable in the next two years to debris flows,” Keller said. “We could get another one right down Montecito Creek this year, if we get another big rainfall, depending on how much debris is left up in the basin. It’s not impossible.”

The catastrophic debris flow of Jan. 9 in Montecito is the deadliest disaster to hit the South Coast since a magnitude 6.8 earthquake struck Santa Barbara on the morning of June 29, 1925, leveling the downtown area and killing 13.

Debris flows launch massive quantities of rocks, boulders, trees and mud downhill. They are typically triggered after wildfires on steep mountainsides, when heavy rains wash away the soil.

“Big debris flows are relatively rare,” said Keller, who is applying for national funding to study the footprint and volume of the Jan. 9 event.

“They don’t occur after every fire in any one stream. The Thomas Fire was huge, and there are only a couple of places with really damaging debris flows. Montecito and San Ysidro creeks were primed for one.”

In catastrophic debris flows such as the one in Montecito, narrow canyons chock full of boulders start to flood and landslides may occur. Rocks and brush form temporary dams, then break through and roar downhill on thick slurries of mud. Car-sized boulders bob along like corks.

In Montecito, the wall of mud and debris was 15 feet high in some locations.

“You may get pulses of flows rushing out of canyons in the mountains,” said Larry Gurrola, a Ventura-based consulting geologist who is on Keller’s research team. “That material reaches the base of the foothills, chokes the streams, flows out over the banks and moves towards the ocean, dragging trees, brush, cars, utility poles and parts of homes along with it.”

Through the millennia, debris flows have shaped the terrain of the South Coast.

Almost all of Montecito and most of Santa Barbara is built on top of flows that occurred here over the past 125,000 years, Keller said: just look at the boulder field at Rocky Nook Park. That’s evidence of a catastrophic flow out of Rattlesnake Canyon in prehistoric times, he said.

During the past 50 years, the South Coast has seen a few destructive but not catastrophic debris flows.

Last February, during heavy rain in the burn area of the 2016 Sherpa Fire, a debris flow washed 20 cars and five cabins down El Capitan Creek and sent boulders into the surf. Emergency crews rescued two dozen campers from El Capitan Canyon resort. 

On Jan. 3 this year, county emergency preparedness officials showed the Board of Supervisors photos of damage from the debris flows that followed the Coyote and Romero fires of 1964 and 1971, respectively. Both years, San Ysidro, Olive Mill and Coast Village roads in Montecito were choked with mud.

This year, the stage was set for catastrophe after the Thomas Fire burned 440 square miles in December, largely in the backcountry of Ventura and Santa Barbara counties, becoming the largest fire in California history.

It scorched the chaparral that anchors the soil to the bedrock and created a “hydrophobic” layer in the ground – a kind of crust that repels water like glass.

In an era of year-round fire seasons, the Thomas Fire had not been fully contained when the rainy season got underway in earnest.

“It was just kind of the perfect storm, when all the bad factors line up together,” said Jon Frye, Santa Barbara County engineering manager. “There was no time whatsoever between the fire and the winter.”

The trigger for the catastrophic debris flow in Montecito, geologists say, was several bursts of extreme rainfall, beginning at 3:34 a.m. One of these was a 200-year event – more than half an inch of rain falling in 5 minutes. That’s a quarter of the total amount of rain, 2.1 inches, that was recorded in Montecito during the nine-hour storm.

A U.S. Geological Survey (USGS) debris flow hazard map that was widely circulated before the Jan. 9 storm showed the high probability of debris flows originating in the mountains above Mountain Drive in Montecito on the heels of the Thomas Fire.

The slopes there are on a “hair trigger,” said Dennis Staley, a USGS research geologist who helped prepare the map. The harder the rainfall, the bigger the flow, he said.

“We knew that if it rained very hard, there could be very significant debris flows,” Staley said. “If you plug in the intensities that were received, our prediction aligns with what we saw.”

In any given year, there is only a half-percent chance that half an inch of rain will fall on Montecito in five minutes, said Jayme Laber, a senior hydrologist with the National Weather Service in Oxnard.

“It was a typical winter storm, but five-minute rainfall was extreme, something that you don’t see very often,” he said.

The 5-minute, half-inch downpour began at 3:38 a.m. near Casa Dorinda, at Olive Mill and Hot Spring roads, county records show.

Between 3:34 a.m. and 3:51 a.m., three additional bursts of extreme rainfall – 50-year events with a 2 percent chance of occurring in any given year – were recorded on gauges near Gibraltar Peak and in downtown Carpinteria.

These were the heaviest short-term, high-intensity rainfalls recorded during the entire storm from Redding to San Diego, Laber said.

“It was horrible that it was right on top of the Thomas Fire burn area,” he said.

The first reports of the debris flow came in to the National Weather Service shortly before 4 a.m.

Meanwhile, there was no major damage in Ventura County during the Jan. 9 storm. Ventura County took the brunt of the Thomas Fire, but was not pounded on Jan. 9 with the short-term, high-intensity deluge that overwhelmed Montecito, Laber said.

The historical record shows that previous debris flows on the South Coast closed Highway 101 and caused a lot of damage to property but did not kill anyone.

In 1964, a few months after the Coyote Fire burned 100 square miles above Santa Barbara, Montecito, Summerland and Carpinteria, records show, a debris flow destroyed 12 homes and six bridges on Mission Creek in Santa Barbara.

Eye-witness accounts told of “20-foot walls of water, mud, boulders, and trees moving down the channels at approximately 15 miles per hour.”

During heavy rains following the 1971 Romero Fire, which burned 20 square miles in the mountains behind Santa Barbara, Montecito, Summerland and Carpinteria, Highway 101 was blocked for eight hours near Carpinteria. A wall of mud and water three feet high pushed across the freeway toward the ocean.

“Looking back, there is clear evidence that this type of thing happens in Santa Barbara with some regularity,” Staley, the USGS geologist, said.

Keller and Gurrola will be participating in a free panel discussion on wildfire and debris flows at the Santa Barbara Public Library Faulkner Gallery, 40 E. Anapamu St., in Santa Barbara at 6:30 p.m. Jan. 25. 

By Melinda Burns | Newshawk