Craigslist.org, the online community bulletin board network, may start charging to list real estate on its New York site. Some brokers are actually welcoming the start of paid ads, which could cut down on duplication and confusion on the Web site.
In the past 12 months, the New York area listings service has seen a 33 percent increase in its unique monthly user traffic, doubled its apartment rental listings and tripled its real estate sale listings, a trend that could affect the real estate classified advertising market, which represents more than $60 million in annual revenues for newspapers and Web sites in the metro area.
Coming on the heels of the Bay Area company’s recent sale of a 25 percent stake to online auctioneer eBay, the potential charge also piques the interest of market watchers looking for steps toward a for-profit operation.
Craigslist chief executive Jim Buckmaster says the fee would be imposed based on user demands, and “to encourage more responsible use of the category.”
The company already charges $25 to post a job listing, which Buckmaster says cuts down on duplication and confusion. Apartment listings are particularly vulnerable to duplication because posters are constantly trying to keep their listings at the top of the page, he says.
“Users have been asking us to start charging brokers, and some brokers said they might like to see us charge as well, because their time is worth more than the cost of a small posting fee,” he says.
After its initial embrace by the dot-com crowd when it started up in mid-2000, the New York site now gets more than 1.2 million unique users a month, up from 900,000 in October of last year.
For the same period, the site now gets 400,000 new apartment listings a month, double its numbers last year. Its unique monthly listings have jumped to 40,000 from 20,000 a year ago.
While most apartment hunters use Craigslist to find rentals, the site’s sale property ads have jumped to 30,000 from 9,000 a year ago and its unique sale listings are now estimated at 3,000 a month, up from about 1,000 a month in October 2003.
“We believe that we are seeing volumes of unique apartment listings that are higher than any other category in New York,” he says.
Neither The New York Times nor The Village Voice, two of the most popular sources of listings in the five boroughs, provided ad traffic figures, but representatives of both papers say the free service isn’t a threat to their market positions.
The Times commands about 80 percent of real estate classified revenues in the New York City area, according to Liron Razak, an independent consultant who said a conservative estimate of its real estate classified revenues was about $910,000 a week, or $47.3 million a year.
The paper of record charges $31.25 a line for its Sunday edition in Manhattan; high-volume advertisers get discounts as low as $18.80 a line.
A Times spokesman said the paper does not disclose the proportion of its revenues derived from print ads versus online ads.
“The New York Times monopolizes the market when it comes to print advertising,” Razak says.
The Times dived into online advertising in 1999, says Jason Krebs, vice president of sales and marketing for NYTimes.com.
“In 1999 we realized that we had a big business in the waiting for our online real estate section,” he said. “Technology started changing the way people searched for homes and rentals and, ultimately, the way business was conducted.”
The Voice, which serves a more local Manhattan market, packages its print and online ads automatically, says Jessica Bellucci, a spokeswoman for the free weekly paper. Its rates range from $17.49 to $11.08 a line, depending on the number of times the ad runs.
While print publications have adapted to an online classified market, some brokers say the brand impact of The New York Times will keep the franchise safe from online incursions.
“A lot of advertising is driven by the seller, and [the Times’ dominance] won’t change until sellers stop believing that having an ad placed in the Sunday New York Times classified sections is no longer worthwhile,” says Karen van de Vrande, vice president of marketing and communications at Douglas Elliman.
She says the sales side is safer from Craigslist than rentals.
“It seems to be appealing to a lower price point,” she says.
Sreenath Sreenivasan, a professor of new media at the Columbia University Graduate School of Journalism, says the established order may change as people adapt to doing more business based on information from the Web, rather than the printed page.
“The thing that’s had a huge impact on real estate is Craigslist,” he says. “It’s been revolutionary, and so interesting. I have seen something almost like fear when publishers talk about losing their classified franchises to the online world.”
Sreenivasan says he’s now hearing about Craigslist as a source for commercial real estate transactions, as well as apartment rentals. “A friend of mine who works for a nonprofit that needed a new space found eight excellent leads, with no middleman fees,” he says.
“Young people now just go right to Craigslist,” he says.
He said an acquaintance who just moved to New York did her apartment search entirely on the site. “She didn’t even look at the Voice.”