Days On Market (DOM) Not a good gauge of anything.
October 26, 2006
Post Tags: days-on-market , dom , Tucson Real Estate , tucson-homes
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Days On Market (DOM) When we take clients to see homes they often ask us “How many days has it been on the market?” If it has only been on a few days, the reasoning goes they probably won’t be willing to take an offer that is a lot lower than their asking price. However, if the DOM is high then they figure they can come in at a much lower offer and have a chance of it being accepted. In Tucson’s hot market of 2005 if the DOM was more than 30 days the question was, “What is wrong with it?” Something had to be wrong if a house was on the market more than 20 days. This year the market changed significantly and the ADOM for September was 50.
Investors and sellers often want to know the average days on market to indicate how long it might take to sell their home. If the ADOM is 50 days, the thinking goes they need to put it on the market a couple of months before they want to move.
Now this reasoning isn’t lost on sellers and their listing agents with homes already on the market. No Seller or Listing Agent wants the DOM to get “Too High” because people will start trying to make “Low Ball” offers or think something must be wrong with the property.
The Answer “Re-List”
Take the property of the market for a couple of hours, and put it back on.
What this does.
- It get a new MLS number
- It comes back to the top of the list of new properties on market
- It resets the DOM to “0″
- It keeps some people from making “low ball” offers
- It makes Average Days On Market Useless
Of course the good agents representing their buyers will check to see if the property has been re-listed before helping their buyer make an offer. In this market we see some properties that have been re-listed 4 or 5 times.
High Days on Market is considered a possible sign of a couple of things.
- There really is something wrong with this property
- A new agent represents the seller and doesn’t know about re-listing
- An agent that just doesn’t care represents the seller
This is why DOM is interesting to know, but by and of itself can’t be used to judge anything about the property without further investigation. Average Days on Market is an interesting statistic from month to month, but a useless statistic.
By The Way, a couple of months ago while trying to get a better snapshot of the true DOM an afternoon was spent looking at listings in the MLS from a random sampling around town. The Average Days on Market taking into consideration re-listing those properties was 197 day. Yep that’s right “197 DAYS”, more than 6 months.
If you are thinking about timing the listing of your home for sale, you might want to contact an experienced agent to find out about how long it will take to sell your home based on:
- Location
- Pricing
- Condition of the Home
- Other homes for sale in your neighborhood
You should not go by the newspaper or statistics for the Average Days on Market.
If you want to find out the DOM for a property call us, we will do the research and get back to you with the true days on market.
October 28th, 2006 at 9:41 pm
Well, I think that days on market-DOM-can be a very good indicator of how motivated a seller ‘might’ be. Everybody’s different and it’s always on a case by case basis, but as days, weeks and months go by with no results, many, and probably most sellers become more anxious to find a solution. And of course you have to check the property history and make sure that you’re seeing all those little WITHDRAWN AND RELISTED events. But in the end, it’s human nature to do what needs to be done to end an uncomfortable situation and move on. That’s why prices drop as DOM increase.
October 28th, 2006 at 10:15 pm
John,
That is true, but it takes some digging as you indicated to find that out. I’m actually referencing the DOM figure that is seen in the newspaper and MLS Statistics as well as the Agent MLS Sheets.
True DOM means being able to see how long a property has been on market including all re-lists is very valuable. Unfortunately, nowhere is that actual figure indicated or reported. Maybe we should call that one TDOM. TDOM is a good indicator of seller motivation and we use it as such all the time. Tucson MLS Statistics do not indicate TDOM only DOM from the last time it was listed not including how many times it has been re-listed.
I think too many times people are using the DOM reported to make decision that should be made after the TDOM has been dug out, as you indicated.
June 18th, 2007 at 10:24 pm
I agree it’s a guide to seller willingness. My last property took a long time and I was more flexible as time went on.