No facet of the fair use defense is based on the fact that one is exploiting a market for the work that the rightsholder currently isn't. On the contrary, the fact that one is exploiting any market at all with the work is a strike against any fair use defense.
Attempting to argue that to a judge that does not employ the same boundary test is therefore likely to fail.
I get these types of responses all the time, whenever someone detects that I am crossing onto foreign turf. The law does not belong exclusively to legislators, judges, and lawyers. I am entitled to have an opinion that conflicts with established precedents. And as many of us are painfully aware, the law is sometimes an ass.
This person is co-opting the images, but not to sell the homes or defame the work of the photographer, but to mock the (ugly) style of the homes. There is no impact to the rights holders or even the people using the photos by virtue of this silly little blog existing.
MST3K has to clear copyrights for the original films, even though they "mark up" those originals in the same way that McMH does. RiffTrax did not have to clear rights with anyone, at the cost of some customer convenience.
I don't know for certain whether MST3K licensed things because they had to, or because they didn't want to be sued to Hell by film catalog rights-holders. It certainly seems like ridicule, commentary, and parody to me. I don't think it matters all that much whether anyone makes money from it or not. A professor can fairly use photos for educational purposes in a class where all the students pay tuition, right?
As a potential juror, I am prejudicially biased that McMH's use is fair use. If I were a judge looking for a test, I think I would ask "Is it sufficiently transformative that this use does not compete with the original?" For MST3K, you're making motion picture entertainment from existing motion pictures. Watching the MST3K version of a work competes with watching the original. So MST3K is not fair use. But reading McMH does not compete with browsing those real estate listings. So it's probably fair use.