US internet advertising research and consulting firm Borrell and Associates has released a new report into online real estate advertising. Here are some interesting highlights from the executive summary:
For years we’ve heard how most brokers and agents despise their local newspapers. They’ve repeated their mantra ad nauseum: The only reason they buy newspaper listings is to appease the seller, not to sell homes. Newspaper ads don’t sell homes, agents and the Internet do. Yet, agents and brokers continued to plow money into newspaper advertising.
Toward the end of 2005, the nearly rotten started looking truly rotten. As home sales slowed down and the inventory of unsold homes grew, the Internet became the most-used method of selling a home – beating out even the old-faithful yard sign. The $11 billion spent on total real estate advertising stagnated, growing less than four percent over the past four years, while the available advertising inventory – the number of existing homes for sale on the market – rose 41 percent in the last 12 months. That metric alone is enough to stop a real estate advertising executive dead in his or her tracks.
While the Australian real-estate and advertising marketplaces are very different to the US, three real-estate agents I am close to tell me that, in their businesses, more than 85% of their leads come from online. In fact, one recommends an online only strategy to vendors.