Gannett's advertising revenue tanked from coast to coast during the real estate market's collapse, especially in four states: Florida, Arizona, California and Nevada. Like virtually all companies, GCI's prospects turn largely on the market's recovery.
This morning, USA Today's Julie Schmit offers an excellent, data-rich story about the consequences on one street in North Las Vegas, where Dayna and Scott Merritt ask themselves almost every day if they should keep paying their mortgage.
"Many other residents on their street, Helens Pouroff Avenue, stopped long ago,'' Schmit writes in her Page One account. "Since the 69 new homes on this street were sold in 2006, almost half the owners have defaulted on their mortgages. Most of the houses went into foreclosure, which helped drive prices down for others on the street."
Her story continues: The Merritts' house has suffered a typical fate. The couple paid $385,000 for it in 2006. It's now worth about $180,000, recent sales indicate, and Las Vegas prices are still falling.
Five years into the real estate crisis, the threat of defaults driven by continued home price declines -- and a sputtering U.S. economy -- is particularly acute in Las Vegas, the foreclosure capital of the U.S. for more than four years.
Related: an interactive aerial photo shows the 69 homes and their original 2006 sale prices. Plus: COO Gracia Martore discusses the outlook in Nevada and the three other states during the first-quarter conference call with Wall Street.
[Image: today's front page, Newseum]
"Many other residents on their street, Helens Pouroff Avenue, stopped long ago,'' Schmit writes in her Page One account. "Since the 69 new homes on this street were sold in 2006, almost half the owners have defaulted on their mortgages. Most of the houses went into foreclosure, which helped drive prices down for others on the street."
Her story continues: The Merritts' house has suffered a typical fate. The couple paid $385,000 for it in 2006. It's now worth about $180,000, recent sales indicate, and Las Vegas prices are still falling.
Five years into the real estate crisis, the threat of defaults driven by continued home price declines -- and a sputtering U.S. economy -- is particularly acute in Las Vegas, the foreclosure capital of the U.S. for more than four years.
Related: an interactive aerial photo shows the 69 homes and their original 2006 sale prices. Plus: COO Gracia Martore discusses the outlook in Nevada and the three other states during the first-quarter conference call with Wall Street.
[Image: today's front page, Newseum]
That is a good piece, but I wonder if housing has somehow become detached from the economy. The mantra used to be where goes housing, so goes the economy. But it clear we are seeing some recovery in some sections, yet not in housing yet. I doubt if we will see any real estate recovery for two years or more as the banks have got to find a way of resolving these underwater mortgages. I do think this means an end to the mortgage deduction on the IRS forms, but that is a discussion for another blog. My view: I don't see real estate ads coming back.
ReplyDeleteOne Gannett site which still has a strong real estate advertising market is Palm Springs. From my experience working there, if corporate would just stop their limiting initiatives at PS, real estate advertising could soar again. The money from that newspaper supports several others which are not doing so well. What that valley needs is another newspaper to have a little healthy competition. In that competition, my prediction is that The Desert Sun would not come out on top, mainly because of corporate limitations.
ReplyDeleteMy observation (for what it's worth) is that real estate is being kept alive by HUD programs. But we are about to see Congress wrap up this debt limit fight by cutting federal housing programs because there is a huge overhang of oversold houses on the market.
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