The $11.6 billion real estate ad market is moving to the Internet

Three new studies from consulting firms Classified Intelligence and Borrell Associates and the investment bank Piper Jaffray say the $11.6 billion real estate ad market is set to shift hard from print to the Internet, according to a BusinessWeek report

Borrell says the Internet real estate ad market, now about $2 billion, will pass the now-$4.3 billion newspaper ad market by 2010. Newspapers have an estimated 37% of the market now, and the shift would mean a difference of as much as $1.8 billion in annual revenue. 

Studies by the National Association of Realtors and other groups show well over 70% of buyers begin searches on the Internet, often by hitting sites like Realtor.com. A January survey by the NAR said 77% of buyers start searching online, up from 71% in 2004. 

The percentage of buyers who pick a home they first identified online, usually before consulting an agent is up to 24%, from 15% in 2004 and 2% in 1997. Only brokers themselves point out more homes to consumers, at 36%. Yard signs and others account for 15%. Newspaper ads accounted for only 5% of sales, according to the NAR.

Newspapers haven't been very effective in competing with Net rivals so far, with newspapers losing big chunks of business in help-wanted and auto advertising as those categories have moved to the Net. 

Hitwise US - Top 10 Industry Search Terms - July, 2006 

The terms listed below are ranked by volume of searches that successfully drove traffic to websites in the Hitwise Business and Finance - Real Estate category for the 4 weeks ending July 29, 2006, based on US Internet usage.

Rank Search Term Volume
1. realtor.com 1.97%
2. real estate 0.92%
3. remax 0.82%
4. apartments 0.76%
5. homes for sale 0.57%
6. century 21 0.55%
7. realtor 0.45%
8. zillow.com 0.45%
9. coldwell banker 0.44%
10. for sale by owner 0.35%

Source - www.hitwise.com - July, 2006 - based on volume of searches.

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