The Days on Market (DOM) metric that’s typically at the bottom of the Northeast Tennessee Association of REALTORS® (NETAR) Trends Report is more than just a data point. It’s a marketing tool and a market indicator that savvy buyers and sellers closely watch.
In March, it was beginning to signal it was taking longer to sell a home. There are two possible reasons for this. One, buyers were pushing back on what they see as asking prices that are too high. Two, some were tapping the brakes because of the effects on the economy due to the pandemic. My guess is it is probably a little bit of both.
The current National Association of REALTORS® (NAR) flash survey says 3 in 4 REALTORS® report that their clients have not reduced listing prices. At the same time, some buyers are beginning to slow down their search in the wake of a flurry of adverse economic reports. We are only starting to see the COVID-19 effects in the March report.
No doubt, some buyers will wait until conditions improve. How many is unclear because our primary markets are considered less vulnerable to the economic impacts of the pandemic. April’s Trends Report will add clarity.
In simple terms, market-wide DOM is the average number of days that it takes to sell and close a property. It is a baseline for all properties, but it’s also unique to every individual property, making it an excellent tool for making adjustments to your marketing plan. A property with a high DOM can be a red flag to buyers. If the location is not an issue, then pricing or property condition need to be reviewed.
The stakes are also high for sellers. New listings get a lot of attention in an inventory-starved market like ours. That is why REALTORS® love to post pictures on Facebook of homes sold within a few weeks of listing. For those properties not snapped up, there is a let down as they spend more time on the market. There are fewer calls and even fewer showings.
The average DOM for single-family resales during March was 121 days. That a little more than the region’s 3.7 months of inventory. By itself, that’s not especially significant, but 121 days is higher than the average during the past 11 months. The signs are even more dramatic in the townhome/condo market. The March DOM was 101 days – the first time in nine months it has been in triple digits.
Those averages are for all price ranges. Rest assured that a property in the $200,000 or below price range spends less time on the for sale than one priced at $200,000 and above. For example, while March’s time was 121 days for all properties, it was 87 days for properties in the $200,000 and below price ranges.
To do a deep dive into the DOM, you have to have access to the regional Multiple Listing Service or REALTORS Property Resouce®. Harnessing the power of databases is a big part of the service REALTORS® provide for their clients. And in a market with low inventory, high listing prices, and the COVID-19 jitters, buyers and sellers need every advantage they can get.