By: Lucia Moses
Real-estate ads have been the lone bright spot in an otherwise dismal newspaper-classified landscape. With real-estate revenue up 10.9% — and help-wanted down 34.5% — for the industry overall last year, it’s not hard to guess which category papers are most worried about. But these numbers, unfortunately, obscure challenges they face in their real-estate business.
Some analysts suspect last year’s gains in this area had more to do with rate increases than with increased ad linage. And the Internet continues to change the way home buyers and sellers do business.
According to the National Association of Realtors’ (NAR) “2002 Survey of Home Buyers and Sellers,” the Net for the first time caught up with print newspapers as a search tool for house hunters. The survey, released last month, showed that 41% of home buyers used the Internet to search for a home — a big boost from the 4% of 2000. Eroding profit margins, meanwhile, have Realtors scrutinizing their ad budgets. And thanks to the NAR’s 6-month-old “broker reciprocity” policy allowing real-estate firms to publish online their full Multiple Listing Service (MLS) inventory, Realtors may decide they can ditch print altogether.
Real estate may be the smallest of the three main classified categories, but it’s not just the $3.5 billion newspapers got in this segment last year that’s at risk. One reason for this is that real-estate ads help generate peripheral advertising from lenders, home-improvement stores, and other real-estate-related businesses, according to the Portsmouth, Va.-based consultancy Borrell Associates Inc., which has produced two recent studies in this area for the Newspaper Association of America (NAA).
But newspapers still have a strong role to play in home searches. A Borrell survey found newspaper Web sites were destinations for 21% of home shoppers surveyed. And Borrell’s newest report suggests newspapers are drawing younger, upscale home buyers with their Web sites’ real-estate verticals.
Since The Free Lance-Star in Fredericksburg, Va., last year became the first newspaper to display all area real-estate listings on its local portal site, NAA estimates 15% of the nation’s papers have struck deals with local Realtor boards to carry their MLS listings. NAA is trying to foster more such alliances.
Bill Blevins, The Free Lance-Star‘s Internet director, predicted papers will have a tough time, though: Most Realtors don’t want to share their listings — and, even if they do, many aren’t equipped to send the listings to newspapers electronically. “For the small to medium-sized paper,” Blevins said, “the technical challenge is immense.”