May 4, 2019

Days on Market is more than just a real estate data point


The Days on Market (DOM) metric found at the bottom of housing market updates is more than just a data point. It is a marketing tool and indicator.

2019 NETAR President

In simple terms, DOM is the number of days from the date a property is listed to the signed contract date. It is an indicator in the marketplace, and can be used as negotiation leverage for both buyers and sellers.  A property with a high DOM in a hot market can be a warning sign to buyers. If the property is not in a less than desirable location, a high DOM is a signal that begs questioning about the price or its condition. Or, once the DOM is on the high side of the median, it can also be a signal for buyers there is a price reduction just around the corner.

Data source: NETAR Trends Report for 11 NE Tenn. SW Va counties

The DOM stakes are high for sellers for a different set of reasons. New listings get a lot of attention in an inventory depleted market like ours. That is why Realtors® love to post pictures on Facebook and other social media of homes sold within a few weeks – sometimes a few days or hours – of listing. The same goes for the often-seen Facebook note heralding a new listing is on its way. For those properties that do not go under contract quickly, there is a letdown when all that new listing attention lulls and there are fewer calls and even fewer showings. It is a fact of life that a property that sits on the market too long tends to be viewed as stale as unwrapped bread left on the counter too long. 

Currently, the average DOM for residential resales in the 11 counties monitored by the Northeast Tennessee Association of Realtors® is 132. In March the average DOM for a townhome/condo resale was 105. Those are averages and include listings for all price ranges.  They are benchmarks.

Rest assured a property at or under $200,000 that is in marketable condition will have fewer DOM than a $500,000 listing. That is why the median DOM is a balancing metric. The median is the point where half the listings are on the market longer, and half are sold quicker.

Data source: Reltor Property Resource for counties monitored by NETAR

According to Realtor Property Resource (RPR), the median DOM for single-family sales in March was 82. The townhome/condo median was 62.  Again, these averages include sales in all price ranges and across the region.

Of course, to get the individual DOM for a property, you must know when it was first listed and do some market research. Simple math again prevails, but that is what hard-core marketing wonks do.

Drill down to the city and county markets and a whole new set of metrics are available.  Go deeper into the weeds and look at comparable listings in specific price ranges and an even more telling set of metrics are available. To get deep in the marketing, you have to have access to the regional Multiple Listing Service (MLS) or RPR, which are not public databases. Harnessing the power for non-public data bases and the network of real estate professionals is a big part of the service Realtors® provide for their clients. In an inventory-depleted, thriving market buyers and sellers need every advantage they can get.  Thinking of buying or selling, contract a Realtor® today!