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Real Estate Ad Bubble Could Burst

The real estate advertising bubble is about to burst for U.S. newspapers, several newspaper analysts say. Even as the real estate market has cooled during the past two years, newspapers’ 2006 real estate ad sales grew to $4.6 billion, or about 8 percent of total newspaper revenue, from $2.6 billion a decade earlier, Advertising Age reported. But the cycle appears to have peaked as major publishers – including Tribune Co., McClatchy Co. and Lee Enterprises – reported real estate ad declines in the high single digits starting in January, the magazine said. “Economic reports projecting steep falloff in new housing sales and starts make further ad declines all but inevitable,” Ad Age said. While Newspaper Association of America Vice President Charlie Diederich said he expected the ad growth to return by the end of this year, classified-industry experts and real estate agents said online players could dominate the category by the time the sector revives.

Copyright 2007 by United Press International

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