Although our cover story this week examined the impact of sharp price cuts in one KB Home development in Las Vegas, it’s worth noting that KB is among the most creative homebuilders when it comes to marketing its product. Former ceo Bruce Karatz built a model home on top of a Parisian department store when KB was selling homes in France. He pulled a similar stunt in midtown Manhattan and inked a successful home design partnership with Martha Stewart a couple of years ago.
On Sept. 26 the company announced a partnership with the Walt Disney Co. where it will offer new home buyers the ability to customize their dwellings with flooring, window coverings, lighting and other home products featuring Disney characters, everything from Princesses to Pirates. (That’s an example of Captain Jack Sparrow’s den in the the photo).
I recently visited Fern Cottage, a model home at KB’s Huntington development in Las Vegas. Would-be homebuyers there are greeted by the smell of warm cinnamon. The house is decorated with pictures of smiling children. On the tables lie books with aspirational titles such as The DuPont’s Portrait of a Dynasty. A room designed to be the boy’s room upstairs is painted in red, white and blue. There are stencils of bicycles, a poster of Lance Armstrong and a bicycle helmet placed strategically nearby.
Near the walk-in closet off the master bedroom a sign proclaims “Wow! Look at that space.” Shopping bags from the Neiman Marcus and other high-end stores are placed inside. The doors are removed from the bathrooms so potential customers don’t make themselves too much at home.
The 1,600 square foot, three-bedroom, 2.5 bath homes start at $225,000. Signs in the kitchens and bathrooms promote various appliance and finishing upgrades and their relatively modest cost per month if spread it out over the thirty year life of mortgage. You’d think given all this salesmanship the houses would be flying off the lot, but that $225,000 starting price is down from $274,000 last year. It’s a tough market.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.