Forecast: Online real estate ads to reach $3.5 billion by 2012

It will not be a watershed increase, but the real estate advertising market is expected to show strong growth online through 2012. According to a forecast from Borrell Associates, online real estate ads will grow from $2.6 billion in 2007 to $3.5 billion in 2012.

by Kristina Knight

What is most interesting, perhaps, is that newspaper ad spending in the real estate market will decrease from $4.8 billion in 2007 to $3.3 billion in 2012.

Overall real estate in the US has been slow for the past two years, which at first led agents to advertise more in traditional publications. However, with fewer homes being sold, agents have begun to look at alternatives to traditional and are beginning to place more advertising dollars online. In 2007, researchers found that real estate ad spending dropped 3%, but even with the decrease in spending, online advertising by real estate agents increased more than 25%.

Economists believe the housing markets will continue to be slow over the next few years as fewer consumers buy their own homes and as mortgages are defaulted upon. According to the forecast, this will lead even more real estate advertisers to turn to alternative markets to reach prospective in-market consumers.

This is not good news for struggling newspapers in the US. Borrell Associates expect newspaper advertising revenue to drop more than 6% from $5.2 billion in 2006. That decline is expected to increase to 16% in 2009 and 13% in 2010 as consumers and advertisers alike turn to online portals.