Understanding Days on Market in Residential Real Estate

Real estate agents have access to a myriad of bewildering stats, data points and information. It's a lot like sports stats...there are lots of them, most are useful, some more than others.

The DOM, or Days on Market count is one of the most insightful. In a nutshell, it tell how many days a property has been on the market. The DOM count is not widely available to the public, though some sites are now incorporating that count as part of search results. In general, though, it is a number that agents see when looking at property via the MLS (Multiple Listing Service).

Most (good) buyer agents share the DOM with their buyers, especially when narrowing down choices. It's an indication not only of length of time on the market, but can tell a story in conjunction with price reductions, amount and/or timing (or lack of any of those).

But the DOM count can be manipulated by agents quite easily, depending on how savvy the agent is, whether or not they care, and how tight the rules are of the local MLS (there is no national MLS; MLS boards are local, and locally regulated. With the exception of a few states, like Maine, there are many MLS areas in each state). Agents can pull a listing off the market, and put it back on again some time later, effectively 'resetting the clock.' As well, slight changes in the address (say, using Street in one listing, and then using St. a subsequent time) can also fool the back-end into thinking a listing is new.

DOM counts are often used by agents and agencies to show the ability of the firm or agent to sell houses quickly. But these numbers can be manipulated and by themselves are only marginally relevant.

Some DOM counts are now including a CDOM (Cumulative Days on Market) to tell a more complete story. A CDOM number might look like: 45/180, meaning 45 days in the current status, but 180 days total. Perhaps the seller took the listing off the market (common around the holidays), or switched agents after a contract expired.

Days on Market tells a story, but what's the message? A listing that has been on the market for hundreds of days...is it poor pricing? A stubborn seller? An absentee owner who is just seeing what the market will bear? It's hard to know. Seller motivations are not made public, but a home that has been on the market for a long time is often incorrectly priced for the market. Every house sells at a given price, but that price and the seller's willingness or ability to price at that level may be limited.

So when an agent, firm or seller talks about days on market, take it with a grain of salt and ask a lot of questions. You'll get a better understanding of how the number was obtained and better insight into the real story.