Understanding “Days on Market”:
Significance for Home Buyers
Just like freshly baked bread, a new home listing captivates buyers with its allure. However, as days pass, the charm fades, and the listing becomes “stale.” Understanding a home’s “Days on Market” (DOM) is vital in real estate. Let’s explore the significance of DOM and why it matters to home buyers.
DOM, also known as “time on market,” represents the number of days a house has been listed for sale from the moment it appears on the local brokers’ multiple listing services (MLS) until the seller signs a contract for its sale. This metric is more than just a number; it serves as a vital indicator for both buyers and real estate agents, signaling which properties are fresh to the market.
As a buyer, you can use DOM as a powerful search filter to identify homes that have been listed for an extended period. But what does the DOM tell us about the housing market? It gives us insight into how hot the market is at a given time. In a seller’s market, where demand surpasses the number of available homes, DOM tends to be shorter due to high competition.
Now, let’s talk about the implications of a higher DOM. When a house first hits the market, the general expectation is that it will sell quickly. After all, new listings generate the most interest. So, if a property sells within a short period of being listed, it could indicate either high demand or an attractively priced home. However, as the days on the market increase, doubts start to creep in. Potential buyers may wonder, “Is there something wrong with the house?”
The longer a property stays on the market, the more questions arise. Is the house overpriced? Does it need staging assistance? Or perhaps it lacks appeal to the majority of buyers. Additionally, a high DOM may lead buyers to assume the seller is unmotivated, stubborn, or even unavailable to showcase the property. However, there is a silver lining amidst all this uncertainty—a high DOM can also signal a potential bargain.
Imagine you come across a house that has been on the market for a considerable time while others are selling quickly. This situation presents an opportunity for negotiation. Sellers who haven’t received offers may be more open to accepting a lower offer. In areas with a surplus of listed homes, the DOM becomes a valuable bargaining tool for buyers. Consult with your agent to learn why the property has lingered on the market and assess the seller’s urgency to sell.
Keep in mind that in some cases, the DOM counter might restart if a listing is temporarily taken off the market and relisted with a new, potentially lower price. This tactic creates the illusion that the house has just hit the market again, piquing buyer interest. Similarly, when a new agent takes over a listing, the DOM may be reset. However, most local MLS associations track the Cumulative Days on Market (CDOM), which accounts for the total time a property has been on the market, including any relisting or agent changes. To gain a comprehensive understanding, work closely with your agent to uncover a listing’s complete history and ascertain precisely how long the home has been up for sale.
Days on market hold significant implications for home buyers. It serves as a gauge of market activity, highlighting the desirability and competitiveness of a particular area. A higher DOM can raise questions about a property’s attractiveness or the seller’s motivation. However, it also presents opportunities for those seeking a potential bargain. By leveraging the knowledge of DOM, buyers can navigate the real estate landscape with greater confidence and make informed decisions that align with their needs and budget.
Remember, just like bread, a home is most enticing when it’s fresh. So, keep an eye on the DOM and savor the possibilities that arise when a listing lingers on the market.
Please don’t hesitate to reach out for more information on this, or a custom report specific to days on market and your overall home buying goals!
Shaunte Cruse | NW Home Collective