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| Big Drop in New-Home Sales
March 23, 2006
When Bruce met Martha
KB Home, one of the nation’s largest homebuilders, reported earnings today. Although profits were up sharply, orders for new homes were down and cancellations were up. “The market is slowing,” KB ceo Bruce Karatz told us earlier in the week. The slowdown is forcing builders to get creative and none more so than KB. The Los Angeles-based company inked a deal to have domestic doyenne Martha Stewart design some of its homes for a royalty fee. That’s Karatz with Stewart in the photo above, posed in front of a home that was modeled after “Lilly Pond,” Stewart’s Long Island estate. The first batch of homes was unveiled in Cary, North Carolina, a suburb of Raleigh on March 6. Karatz says 3,500 families came through on opening weekend and all one hundred of the homes put up for sale were snapped up. Stewart’s touches included open shelving in addition to cabinets in the kitchen (see photo below) and built-in desks near the children’s bedrooms. “She thought of a lot of things we wouldn’t have,” Karatz says. “Like putting a dining room table big enough for sixteen people in the living room to show that you can accommodate big Thanksgiving dinners in the home.” Karatz says he’s rolling out the new Stewart designs in a half a dozen other cities starting with Atlanta this Spring and including Houston, Orlando and Las Vegas. Karatz has proven to be a clever marketer in the past. He’s built model homes on the roof of a Paris department store (KB is a big builder in France) and in Midtown Manhattan. But nothing has come close to Martha. “We have 650 communities,” Karatz says. “I don’t think we’ve ever opened with that kind of demand.”
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I think that's a great idea, incorporating someone with a good sense of design into building a home will of course bring in ideas that a conventional home builder would have never thought of. Kudos!
Posted by: Summit County Real Estate at March 23, 2006 05:10 PM
Ya' gotta' have a nice house when you're under house arrest.
Posted by: The Anti-Martha at March 23, 2006 05:51 PM
Martha & Bruce have alot in common...
"SEC Probing KB Home
The company's announcement of the SEC inquiry follows press reports that CEO Bruce Karatz cashed out nearly $100 million from stock options dated from periods when the stock price was unusually low. "
Stephen Taub, CFO.com
August 25, 2006
Posted by: omanso at November 7, 2006 01:39 PM