Why Days on Market Data Really Matters
Days on market, often abbreviated DOM, is the measurement of the age of a real estate listing. The figure is the time between which a property is listed for sale on the multiple listing service (MLS) and when it has sold firm or taken off the market.
Generally, DOM is shorter in a seller’s market where buyer demand outstrips housing supply. Conversely, DOM is higher in a buyer’s market because there’s more inventory than demand. This puts buyers at an advantage as the longer a home is on the market, the more likely it is to sell for under asking price.
But there’s more to DOM than that.
As a buyer, what you really want to know is the cumulative days on market. This refers to the number of days a property has been on the market irrespective of whether it has been listed more than once by the seller.
Why is this important?
Because the number of days a home spends on the market directly affects its selling price. Generally, the longer a house sits, the greater potential for buyers to score a deal.
Often, if a property has not sold within a certain period of time or on the offer presentation date, a Realtor will terminate the listing and then repost it to MLS so that it appears new, sometimes with a price adjustment. Depending on the strategy, the price may be lower or higher. Typically, it’s higher after an offer presentation date that did not generate an offer price to the seller’s liking. (Realtors intentionally low-list in a seller’s market to generate a bidding war and drive up the price.) Regardless, the purpose of re-listing is to put the property upfront again, as homes typically generate the most interest when they’re new to the market.
So, be sure to ask your Realtor to do a deep dive on a listing’s full history. This way you will know exactly how long the home has been for sale and whether there’s room to negotiate price.