Home seekers favor newspaper media input

Why would anyone want to own a house? That is the question I usually ask myself in frustration while attempting unanticipated home repairs. There's plenty of time to ponder possible answers, especially while lying on the floor with your head underneath the sink and attacking the drainpipe with a wrench.

Apparently, some people are still buying homes, even amid the as-yet-unde?clared recession. According to data tracked by the National Association of Realtors (www.realtor.org), sales of existing homes in July rose 3.1 percent from June to 5 million units, seasonally adjusted. That was the highest level in five months and the largest percentage increase in a year and a half.

"Sales have picked up significantly in several Florida and California markets," says Lawrence Yun, NAR chief economist. But he also notes that inventory levels remain high and that the market will require time to absorb the excess.

At presstime in early September, it was unclear whether the data suggest that the market is actually stabilizing. NAR data for July showed that the housing market had 11.2 months of supply at the current rate with the average sale price at $210,900, down 7.7 percent from July 2007.

Sales of foreclosed properties accounted for about one-third of the July sales increase. And while lower prices stimulate increased sales, those prices themselves mean lower overall household wealth even as the cost of borrowing is up and employment continues to drop.

Stabilization would no doubt help the overall U.S. economy and would spill over into industries affected by housing-related activities. With real estate advertising down in the mid-30 percent range, stabilization can't come fast enough for a newspaper industry currently suffering an abysmal financial year.

But even in bad times, newspapers--in print and online--remain a vital primary source of information for prospective homebuyers, according to the CNW Marketing Research Inc. (www.cnwmr.com) purchase funnel data (see chart).

At the initial stage, when buyers are evaluating personal and family housing needs, newspapers have the advantage as the primary source of information. That continues in the second stage when buyers are refining their needs relative to the type of property they seek.

The middle part of the process is more of an information free-for-all, with buyers utilizing real estate guides, agents, online and newspapers.

Real estate agents become the most important source when buyers begin to narrow the focus on location at stage five. In the final two stages of the buying process, as buyers home in on specific properties and values, newspaper media achieve clear dominance over all other sources as 45 percent of buyers use them as the primary source.

The housing market may not improve this year but certainly will do so in some markets next year.

Newspapers need to remind real estate agents and brokers that their media are more important than ever in moving that inventory of homes.

Jim Conaghan is NAA's chief economist and vice president of research.