Two interesting bits of news.

Traffic for online real estate sites grows 

According to an article in Invertia, Fotocasa’s audience grew by 19% in February 2008. According to NielsenRatings, Spanish real estate websites had a total audience of 3.2 million viewers, or 17% of the total Spanish Internet audience. Fotocasa claims to have 1.6 million viewers, according to information provided by Market Intelligence, which would make it the most visited real estate site in Spain. The interesting bit is that Idealista generally also claims to be the number 1 real estate portal in Spain, and at least in the public imagination (as represented on the blogosphere), it is. And it’s strange that Invertia uses the sector numbers from NielsenRatings, but gets Fotocasa’s numbers from Market Intelligence, without any attempt to reconcile the two methodologies.

In any case, the good news that the crisis is not hurting the growth of Internet property sites. Fotocasa, in particular, seems to have wisely diversified its offering more to reflect current market conditions, with a healthy focus on rentals.

People will always need a place to live — the question is just whether they’ll have to buy it, rent it or share it.

But Banks Are Helping to Kill Real Estate Agencies and Developers

On the other hand, César Villasante (whom I met at SIMA and who is a really cool guy) has an interesting post about how Spanish banks are responding to the current crisis by discouraging potential home buyers. Based on anecdotal evidence, César recounts that many Spanish banks are counseling potential buyers to invest in the banks’ investment funds rather than buy property. The banks argue that property prices will continue to drop dramatically, so there’s absolutely no rush to buy right now. In fact, from the banks’ perspective, since the property itself is the biggest guarantee of a mortgage, banks have no interest in financing overvalued homes, because if and when the value of the purchased home drops, the banks’ risk exposure only increases. So the banks prefer to wait until the amount that they’re financing reflects the real value of the home, so that their risk is minimal in the event of foreclosure (and in the context of the current liquidity crisis).

When combined with the fact that the banks are not interested in bailing out failing real estate agencies or developers, the bottomline is that the banks are helping to hasten the death of a large portion of the real estate sector — on the one hand largely refusing to refinance vulnerable real estate businesses and on the other hand counseling buyers to wait until prices drop even more before buying property (or alternatively refusing to finance home purchases unless the potential buyers can provide lots of guarantees).

In the current market, time is on the buyers’ side, and it’s certainly on the banks’ side.

But with few realistic prospects of sales or refinancing their debt, the clock is definitely ticking for most real estate professionals.