The volatility in the real estate market is concerning, nay alarming, across the board from home-buyers, to lenders, to builders. Moreover, the recent upward trend in home foreclosures has compelled President Bush and the Congress to pass the Housing Bill, which comes as a huge respite to hundreds of thousands of homeowners on the brink of foreclosures and to mortgage lenders who bet heavily on sub-prime mortgages, especially two giants in the game - Fannie Mae and Freddie Mac, now with books full of bad mortgages.

We looked at the trend in visitation across all Web sites within the Real Estate category and mapped it with the movement of the Case-Schiller Home Price Composite-20 Index. While the average price/value of a home in the US has been decreasing since the summer of 2006 (down more than 36 points), we see a significant growth in unique visitors (>11 million) to sites within this category during the same period. With the downward turn in home sales, it is likely that current homeowners may be visiting real estate sites to check their home’s value, keep tabs on interest rates, and keep abreast of other relevant information. Moreover, it is also possible that potential home buyers may be increasingly on the lookout for affordable homes.

The most traffic has been across a few key sites. Realtor.com has historically had the highest number of visitors and continues to do so. Yahoo! Real Estate and MSN Real Estate sites have seen some steady growth in visitors since 2005, while Yahoo! Real Estate has had a sharp rise in visitors since early 2007. Overall, AOL Real Estate has seen a decline in visitors.

While the number of visitors to real estate portals is on the rise, there has been a steep decline in advertising in the “Financial Services, Lender and Home Equity” category since December 2007, as reported by AdRelevance. For instance, in January of 2008, Countrywide Loans was the top advertiser delivering close to 6 billion impressions online, but since February it has maintained fewer than one billion impressions online. Other top contenders in the category (Citi Mortgage, GMAC Mortgage, Bank of America, Wachovia, etc.) have either completely withdrawn or drastically reduced their online advertising in this category, though the category experienced a slight up-tick in July.

It seems like online research content and news sites are drawing a steadily growing audience, but the advertisers are taking a step back with their investments in online advertising. Stay tuned for how the year winds up!

Tags: loan, online advertising, real estate