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There is a bursting property bubble in the news publishing sector. Since the mid-1990s, property promotion has been a constant stream of economic activity for the countless issues facing all publishing companies, as a mix of low interest levels and available incomes of infant boomers has resulted in an unparalleled property booming economy. However, the slowdown in this booming economy over the past two years has not dampened news ad selling - which rose as homes remained on the streets longer and needed more publicity - and property ads increased to $4.6 billion, about 8% of news revenues, from $2.6 billion just a decade before.
"You' re speaking of 11 consecutive years of consecutive expansion, and that's unmatched in any other category," said Charlie Diederich, VP-classified advertiser for the Newspaper Association of America, who forecasts that the property appreciation trail will end this year. "Unless we find a new place to grow, Wall Street will beat us up again and again."
Mr Diederich said that the housing issues of papers are cycle driven and that once the settlements are free of total value year-on-year that has been blown up by hedge purchases and strongly encouraged development deals, once year-on-year economic recovery will resume, Mr Diederich said that the housing issues of papers are cycle driven and that the economy will grow again. However, classified sector professionals and realtors are arguing that the class of on-line gamblers could be dominant if it comes back to life.
"Many salespeople think the magazine is an important promotional instrument, but it's not," said John Most, whose ad sales company does ad creativity for the National Association of Realtors and several large real estate groups with Prudential. "Papers just aren't that interactive." Actually more efficient for real estate agents, said Mr. Most, is to advertise brands in the newspapers, which attracts the user to a site on which the offers are.
However, Jim Townsend, a director at the Classified Intelligence ad agency, said that research has shown that nearly 80% of home salespeople launch their search on-line, not in the papers. Said the biggest threat to papers were vendor-created Web pages and listing pages. "Many of the brokers we speak to tell us that the only reasons they continue to advertise is because their customers are expecting the ad to appear in the newspaper," Mr. Townsend said.
"It is my own view that this has more to do with cyclicity than with the Internet," said James Goss, a news analyst at Barrington Research Associates in Chicago.