“Is the housing market the final nail in the coffin for newspapers?”
That is the question posed by an item on truliablog, a site that tracks the real-estate markets in big cities. Declines in the volume of classified advertising in newspapers related to housing, notes the item, pose a real problem for dead-tree dailies.
All decade, newspaper execs have complained that Craigslist is killing their classifieds. The 2008 report of the Project for Excellence in Journalism says Craigslist has “gobbled share in general classified and is a presence in real estate….”
One question: Have these analysts picked up a classifieds section lately? If they did, they’d come upon the shocking revelation that the housing sector is, in fact, shoring up newspaper classifieds.
The collapsed housing sector, that is.
Foreclosure notices are filling in where condo sales and auto deals once held sway. “There are definitely more than we’ve ever seen,” says Ginger Stanley, executive director of the Virginia Press Association. “I’ve been in the business 30 years.” Here’s what Stanley’s talking about: On March 13, the Washington Post’s classifieds section totaled 22 pages, approximately 14 of which were devoted to what are technically known as “trustee’s sales.”
This, in a town that, according to industry site RealtyTrac, ranked 41st in the country in foreclosure proceedings, with 28,455 filings in 2007—about 575 percent more than in 2006.
Area municipalities require that foreclosure sale notices be placed in local newspapers with broad distribution, and much of the resulting business lands with the Post and the Washington Times. “Classifieds has always been a good harbinger of where the economy is going,” says Charlie Diederich, marketing and advertising director with the Newspaper Association of America. “In good times, that category shrinks.”
And it’s one category Craigslist can’t touch. Placing a legal notice on Craigslist or some other site won’t satisfy municipal distribution requirements. No bother—the masses aren’t clamoring for more online legal ads. “No one’s begging us for a legal notices section,” says Jim Buckmaster, CEO of Craigslist.
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Different localities have different rules as to which newspapers can carry legal notices. Every jurisdiction in Virginia, for example, has a commissioner of accounts who sets the criteria for newspapers in their jurisdictions. Heidi Covert, a paralegal at Commonwealth Asset Services Inc. in Virginia Beach, says trustees aren’t constrained by publication frequency: Some of the papers Commonwealth advertises in are weekly, says Covert. “It’s what’s most generally circulated in that area where the deed was recorded,” she says.
Ten years ago, the country was in the middle of a tech boom, and advertising sales directors weren’t yet waking up screaming at the thought of losing their summer homes. A comparison of Washington Times classified sections on Tuesdays and Thursdays the first week of May suggests a trend: Trustee ads made up an average of 9.4 percent of the ads in 1998, 17 percent in 2003, and 37 percent last year. Last week, it was 63 percent.
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Covert says a typical 9.5-inch ad in the Times will run her firm “$700, $800,” which means a robust foreclosure mill could spend $9,000 or $10,000 per day. Compared to the Richmond Times-Dispatch, she says, the Washington Times is cheaper.
A quick scan of last names of foreclosed deedholders in April 21’s Times: Younis. Orellana. Renderos. Carbajal. Akakpo. Ezeonye. There’s plenty of more popular U.S. surnames, sure, but the plurality of such names is especially striking in a paper that used to regularly whip up its readership with subtle headlines like “Illegals Deal Alienates Everyone” (5/19/2007). The Rev. Moon’s paper has managed to monetize immigrants whether they’re coming or going.
Legal notices are perhaps the last remaining monopoly of the classic American newspaper, which once exerted a vise grip over various types of advertising and news dissemination. The lack of competition for carrying these ads is a function of government regulation: Municipalities still don’t trust the Internet to broadcast these vital notices to the entire community, including underwired low-income citizens. “In many parts of Virginia,” says Stanley of the state’s press association, “people don’t have access to the Internet yet.” But the old indigent-Web- access-problem, suggests Craigslist’s Buckmaster, is getting a bit old itself. “The people who are not online at this point, I suspect, are probably also not reading newspapers,” he says.