Opinion

The Great Debate

Look at a house, get a free Mouse?

September 23, 2009

Scott Malone
- Scott Malone is a Reuters correspondent in Boston.-

Judging by the 52 percent run-up up in the Standard & Poor’s home builders index over the past three months, investors have been eager to get their money back into the long-slumping U.S. housing sector.

Home buyers, not so much.

Finding that tax credits for first-time buyers and low mortgage interest rates are not enough to lure in buyers, Los Angeles-based KB Home this weekend will be tossing in another incentive: Come look at one of their model homes this weekend and get a free stuffed Disney character.

For those shoppers willing to make the jump from looking to buying (and financing through the company’s mortgage arm) the company will throw in a room decorated in their (or their child’s) favorite Disney theme.

Homebuilders in recent weeks have been sounding more confident that the three-year-long slump they have endured — which kicked off the worst downturn the United States has seen since the Great Depression — may be leveling off.

Lennar Corp chief executive Stuart Miller on Monday said the housing market was on the “road back to recovery,” even as his company reported a deeper quarterly loss.

But some on Wall Street are raising concerns that investors are getting ahead of themselves in banking on a rebound.

“Some market observers are anticipating a faster recovery than we consider likely,” wrote BGB Securities analyst Merrill Ross, in a note on the sector.

Investors will have another reality check on the turnaround on Friday, when KB Home reports quarterly results.

But those numbers will come a bit too soon to show whether Mickey Mouse was enough to lure potential buyers off the sidelines.

Comments
4 comments so far | RSS Comments RSS

Home prices are down, mortgage interest rates are down, and there is an $8,000 tax credit for “first time” home buyers; but builders still have to come up with ‘incentives’ to get buyers in the door. Yeah, that sure is a good sign for economy, alright. No wonder they are going to extend the tax credit for anther year (through the 2010 elections).

Posted by Cordell | Report as abusive
 

While its a good idea, I tend to believe that many people still aren’t ready to buy a home yet.

It is quite ingenious to offer a Disney Themed room to a home buyer as I know a lot of people whose children want a Disney room.

Posted by Liadan | Report as abusive
 

It may be that there is a lot of investment money floating around again, but not so for American middle class who are the potential home buyers. The middle class lost money in the stock market, and they are not the ones who have made money in the recent market upturn. Also, unemployment is still high, and people are still nervous. Most of the money that our government created out of nowhere still has not fallen into the hands of the middle class. It’s too bad that some of that money couldn’t have been used to create jobs.

Posted by Juan R | Report as abusive
 

Born into a mickey-mouse economy led by dubious masked cast members, the children of today may grow up to assume mammoth student loans in order to acquire MBAs from Disney U. by means of which they may then qualify for jobs to pay for tacky clapboard nests where their offspring in turn lead Church Mice lives. So the queasy decor thrown in by those builders is certainly portentous…

And it isn’t merely unimaginative small-world indoctrination. It’s debatably heritable acquired lending deficiency syndrome by any other name.

Posted by The Bell | Report as abusive
 

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