By: Leo J. Shapiro, Erik Shapiro and Steve Yahn
Time was when house hunters mostly pored over newspaper ads, but now the Internet is grabbing a substantial share of the housing ad market.
Our Leo J. Shapiro February national consumer survey finds that in the past seven days, 3% searched newspapers for housing, but in the same period, more than twice as many [7%] searched the Internet for housing. 1% used both newspapers and the Internet to shop for housing in the past seven days before the survey.
Over a more extended period, one in four (26%) reported searching newspaper ads for housing and a like percentage (27%) searched online for a new place to live.
The Internet is gaining housing ad share because of its unique ability to deliver large amounts of easily searchable information. House hunters are hungry for a massive amount of information so they can weed out the clunkers and narrow their search to get the most out of time spent actually visiting houses to look at them.
They want more information than appears in the print edition of newspapers. The February survey finds that 42% of all consumers say they would be more inclined to visit the online edition of the paper if it provided more information than what appears in the print edition.
This fight over housing ad share is taking place in an era of great housing market volatility.
The propensity to buy housing in February was close to a two-year high. The percentage of consumers planning to buy housing shot up six points to 17%, and the percent actively shopping — reading ads, checking prices — also shot up six points, to 12%.
The situation reversed in March, when consumer propensity to buy housing dropped to close to a two year low. The percentage planning to buy housing dropped four points between February and March and the percent actively shopping for housing dropping back to six%, matching the level that had obtained in January.
At this point in time, the market for housing is subject to spasms. Since the pace of evolution is some increasing function of environmental volatility, the near future will see quantum leaps in the quality and usefulness of housing ads delivered on-line.
What remains uncertain is whether those on-line advertisements will be reached in the on-line edition of a print newspaper or via an Internet based search engine.
A newspaper’s housing ad section can remain a profit center if it evolves into an enticing entrada to the newspaper’s online housing ad section.
Newspapers that fail to integrate their print and online editions are handing the market for housing ads over to Internet companies.
Advertisers — paper, web, both, and neither — who want to retain some share of the housing ad market need to be more sensitive to how consumers feel when they hunt for housing.
Leo J. Shapiro & Associates national surveys of 5,398 consumers conducted between March 2006 and February 2007 show that over half of consumers (56%) who are planning to buy and actively shopping for housing feel great about their personal finances, but only 30% of those not planning to purchase a home feel that way.
A consumer is counted as feeling great about their personal finances if they report that the balance between their assets and income vs. their debt and spending is better this year than last and will improve in the coming year.
Also among these consumers planning to buy, those who are shopping actively for housing — reading ads, checking prices — have significantly higher happiness scores than those who are just planning to buy but have not taken the plunge and begun to shop actively. Planners who are not shopping actively have a happiness score of 1.63 compared to a 1.89 happiness score for active shoppers.
The happiness test rates consumers in terms of the number of experiences they have had in the prior few weeks which induced bad versus good feelings. The scores range from a high of +5 for happiest to -5 for least happy.
The greater happiness of active shoppers versus passive planners to buy housing reflects the exhilarated feeling that comes with the hunt. Specifically, 66% of active shoppers reported feeling “particularly excited or interested” in something in recent weeks compared to only 57% of those planning to buy but not shopping actively for housing.
A shopper turning or clicking to a housing ad section tends to be financially sound, happy, and excited about life. And that’s a shopper worth fighting for!