The real estate slump claims another victim: newspapers
The real estate boom/bubble of the past few years had a lot of interesting effects on the American economy that are now being unwound. One was that everybody's brother in law became a mortgage broker. Another was that consumer spending kept rising even though incomes were stagnant. Yet another, which I hadn't really thought about before, was that it made the struggling newspaper industry look slightly healthier than it actually was. From today's W$J:
In the first quarter, revenue for every major ad category -- classified, national and retail advertising -- was down. The sharpest declines were for classifieds, where spending dropped 13.2% -- not so much a result of competition from the Web as of economic woes affecting certain categories of advertisers. Real-estate classifieds, until recently a bright spot for the industry, have plunged along with the property market. Auto and employment classifieds are also sinking. Financial-news outlets such as the Journal are being hurt by a slump in technology advertising.
"Right now, you've got a perfect storm," says Edward Atorino, an analyst with financial broker Benchmark Co. He predicts total ad revenue will fall 4.3% this year. The decline will be one of the steepest in history.
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I find it interesting that they are not blaming the web on declining real estate sales. When I bought my current house almost two years ago, I didn't even look in the paper -- the information available on the web is far more complete, and usually includes pictures, info on taxes, and an exact street address -- even before I contacted my realtor, I'd checked out a bunch of prospects from the outside, and had narrowed my choices to three.
So when I contacted my realtor, I instructed her to act as a buyers agent for me, and if she did a good job she'd get the listing on my old house. (which she jumped at, since my old house was going to sell for three times what I planned on spending on a new one).
Long story short, I find it hard to believe that "the web" didn't play a role in declining ad sales --- of course, builders and developers and agencies will continue to place ads in the paper because it guarentees them (favorable) coverage of the real estate market -- especially every time a new development opens, or an old building is converted into a condo. But I'd be very surprised to find that the percentage of inquiries based on newspaper ads hasn't declined significantly, while the percentage of inquiries based on information found at sites like Realtor.com hasn't skyrocketed.
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