Real estate advertising has been a source of uninterrupted growth for newspapers since the mid-1990s and into the early 2000s during the unprecedented housing boom.

Even as that boom began to cool over the past two years, real estate newspaper ads didn’t slow. In fact just the opposite happened — as homes began remaining on the market longer, real estate ads grew to $4.6 billion from $2.6 billion a decade earlier.

But now the real estate slowdown is catching up with advertising.

As early as January, major publishers including Tribune Co., McClatchy Co. and Lee Enterprises posted real estate ad declines in the high single digits.

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In an interview with Chicago Business, Charlie Diederich, vice president of classified advertising for the Newspaper Association of America, said, "You’re talking about 11 straight years of growth, and that’s unrivaled by any other category. If we don’t find a new growth area, Wall Street is going to keep beating us up.”

According to Diederich, the real estate advertising growth trend will end this year.

Diederich opined that "newspapers’ real estate problems are cyclical and that annual growth will return once the comparison are free of yearly totals inflated by speculative buying and heavily promoted developer closeouts.”

But, observed Chicago Business, classified-industry experts and real estate agents argue the category could be dominated by online players by the time the market revives because that vehicle is more interactive.

More effective for brokers, offered one expert, is brand advertising in the newspaper that draws users to a Web site where listings are.

Still another expert disagreed and said research has shown nearly 80 percent of home sellers start their searches online, not in the newspaper. He said the greatest threats to newspapers are seller-based Web sites and listing sites.

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