Consensus on the dulcimer digest a few months ago was that they were extremely inconsistent in quality, and most of them had impossibly high action and dreadful intonation. While there is a place in the world for "starter" instruments, said instruments should be minimally functional. I returned to the guitar on a $250 Alvarez small bodied that played nicely and was perfectly in tune. I moved on to a Martin (two actually -- GAS strikes), but my little Alvarez is enjoying a second career with a friend who wanted to experiment with alternate tunings and didn't want to shell out for another guitar just now. On the other hand, you can get a dulcimer from a reputable American builder for under $300 -- Black Mountain, Folkcraft and McSpadden all have instruments in that price range or lower. It's one of the few instruments where you can get top quality without breaking the bank (I know, the prize goes to harmonicas and penny whistles, but after that...). On the other hand, the Maulwart dulcimers are probably bringing a few more people into the fold who would not otherwise known of the existance of the instrument. When I play out, at least 50% of the people who stop to listen also ask "What's that?" -- then there's the 5% who say "I have one in my closet."
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