Would You Buy A House From Justin Bieber?

Written by Phil Hall
on June 21, 2010 No Comments
Categories : Blog View

[u]BLOG VIEW:[/u] [/i]Anyone who pays attention to popular culture will affirm that teen singing sensation Justin Bieber has the ability to sell CDs and sell out major concert venues. But can he sell homes?[/b] No, Bieber isn't branching out into real estate finance. However, a prominent home builder has hitched their wagon to his star, with the hopes of ‘Bieber Fever’ (yes, that's what his promoters call his popularity) will help generate origination in a particularly rough market. The other day, KB Home announced a contest in which it would give away four tickets and soundcheck passes to Bieber's July 24 concert at the Planet Hollywood Resort and Casino in Las Vegas. The catch, however, comes in how one can win such a grand prize: You have to visit one of KB Home's Las Vegas-area communities and register on-site (presumably after receiving the full-throttle sales pitch on the communities). The contest runs through July 5, so it is too early say whether Bieber's fans (who have been known to disrupt Facebook and Twitter with overcooked adulation of their pop icon) will take the bait for this promotion – or, at least, get their parents to motor out to a KB Home community in Las Vegas to enter the contest. For those unfamiliar with the Bieber phenomenon, his youthful fan base's focus is strictly on homework, not homeownership. From a marketing standpoint, contests like this are fun and harmless. And KB Homes deserves kudos for scoring PR points by aligning itself with such an unlikely entertainment figure. But in the bigger scheme of things, does the industry really need gimmicks such as this one to originate home sales? If last week's statistics from the Mortgage Bankers Association (MBA) is any indication, that doesn't seem like a necessary approach. Last week, MortgageOrb reported that the MBA's Market Composite Index – a measure of mortgage loan application volume – increased 17.7% on a seasonally adjusted basis from June 4-11. On an unadjusted basis, the index increased 29.7% compared with the previous week, which was a shortened week due to the Memorial Day holiday. The MBA also reported that its Refinance Index jumped 21.1% from the previous week. That is more than impressive – it is the highest Refinance Index recorded in the survey since May 2009. Yet the MBA wasn't too eager to uncork the champagne bottles. ‘While it is clear that purchase applications in May dropped sharply as a result of the tax credit-induced increase in applications in April, it is unclear whether we are seeing the beginnings of a rebound now,’ says Michael Fratantoni, the MBA's vice president of research and economics. Of course, those of us who prefer our glasses half-full will point to a number of potholes that can still disrupt our race: jitters in the commercial real estate market, unemployment levels that are still too high, a general economy that is far removed from vibrancy and various hiccups from overseas economies. Nonetheless, there is reason to be hopeful and optimistic. The MBA's data matches the sense of hopeful optimism that I sensed throughout the organization's recent Secondary Market Conference, where most of the participants believed that the worst of the economic crisis might be behind us. If the industry is still many miles from being in the neighborhood of full-fledged recovery, at least it is in the vicinity of stabilization. And for those who are truly confident in where the industry is heading, it wouldn't be too corny to start humming (if not raucously singing aloud) an old tune that, I believe, is not part of the Justin Bieber playlist: ‘Happy Days Are Here Again.’ [b]On a side note: [/b]A great deal of Justin Bieber's popularity comes from his presence on Twitter and Facebook. As luck would have it, MortgageOrb is also on Twitter and Facebook. If you have accounts on both of those popular sites, please connect with us at [link=http://twitter.com/MortgageOrb]on Twitter[/link] and [link=http://bit.ly/dwLhHe]on Facebook.[/link] – Phil Hall, editor, [b][i]Secondary Marketing Executive[/i][/b] [i] (Please address all comments regarding this opinion column to hallp@sme-online.com.

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