I actually have never been to Montecito (that I'm aware of...been so many places I can't keep track anymore)....so, I guess my post is a bit biased. However, I live an hour from Carmel, and it is so beautiful. I was just there last weekend -- we often go just for the day.
My daughter and I love to go to Tuck's English Tea House -- they have tea time with scones, and fruit trays, and tea and whipped cream.
It's lovely to walk around, extremely safe and clean. I've seen Merv Griffin driving around in his sports car, but I don't look for celebrities, sometimes you can't avoid them.
There's a nice beach, loads of shops, tons of restaurants, charming houses. Unfortunately, very expensive -- as stated before, a one-bedroom cottage will set you back at least a million.
It's only about 10 minutes from Monterey, which is less expensive, has Cannery Row, the Aquarium is spectacular, lots of bike and hiking trails near the ocean. And Carmel is only an hour from Santa Cruz, where you have the University of California/Santa Cruz, and the downtown Pacific Avenue mall to walk around and see why the bumper stickers there say "Keep Santa Cruz Weird." Santa Cruz also has the Boardwalk amusement park, great summer concerts on the beach for free (saw Jefferson Airship there). They also have a great wharf and you can get up close to the sea lions.
And as you said, then there's San Francisco. I like San Diego -- very pretty -- but San Francisco has more of a lively vibe, seems to have more going on. But San Diego is close to Mexico, if you like to visit down there.
Although I can't compare, I can at least tell you that Carmel is a charming, special village, that can fetch a pretty penny for housing because so many people would love to live there.
