Saturday, July 19, 2008

Trading Equity for a Lawnmower

There were some crazy things happening during the Great Housing Bubble. If you owned a home it seemed that you could get money for nothing. We all turned into rock stars and Rockefellers. Using our house - or what we owned of it - to buy things we could not otherwise afford. From luxorious cars to lawn tractors - yes lawn tractors. This brings us to an article from the Washington Post called Deere John: It's Been A Good Ride. Let's take a look -

The riding lawn mower has long been a barometer of the American dream, been a symbol of having arrived in the suburban middle class. It says, "I have so much lawn to mow, I need to sit down."

It says, I've made it, I've escaped that funky old rowhouse neighborhood with the asbestos siding and yards like dirt-scabs. My land, my spread, not enough to plow, but way too much to mow the old-fashioned way. It says, I'm Jefferson's dream of the yeoman farmer. It says, I'm rich enough to not only raise a worthless crop, but to pay money for the privilege. It says, I'm a boy with a boy's rightful toys; a real American man.


Now it's saying something else. It may be a measure of the forces lined up against us. The riding mower seems to be on the wrong end of every headline. If economic news -- from gas prices to shrinking nest eggs -- is like the magnifying glass focused by an 8-year-old to fry a bug with sunlight, riding mowers are the bug.

The news: The riding mower industry "is deeply troubled by the decline in housing starts," says Kris Kiser, spokesman for the Outdoor Power Equipment Institute in Alexandria. "New home construction is a good barometer for us. But you add foreclosures, decline in housing starts and the decline in housing sales, and you have the trifecta."


"There were a lot of people using up home equity to buy Lexuses and $8,000 lawn mowers," he says. His sales of these mowers are down by a third.

While that does seem a bit excessive - at least they are the owners of their lawnmowers. The people who are spending the equivalent amount on lawn service will not even own their mowers in the end. There is nothing wrong with lawn service - if it fits within a budget. However if home equity lines need to be used to afford things like lawn service, nail salons, designer clothes and eating out - then current choices and life styles are not sustainable.

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