Days on market (DOM) is a measurement of the age of a real estate listing. The statistic refers to the number of days a listing is active on the market from the time it is listed for sale until it enters pending status (conditional or firm offer, suspended or cancelled listing, expired offer etc).
The average days on market statistic is often used as a "thermometer" to gauge the temperature of a specific housing market. Key word here is specific market. In our area, we consider waterfront and non-waterfront as two separate markets.
And where possible, it is important to stay within a comparable geographic region. For example, the market for waterfront properties in the Kawarthas is quite different than in Muskoka or Haliburton.
In January 2019, average DOM for Kawartha waterfront property was 73 and non-waterfront 67. For January 2020, the numbers decreased for waterfront at 55 days whereas non-waterfront remained relatively static at 68 days on market. This represents a year-over-year change of a decrease of -8% for waterfront property and and increase of 23% for non-waterfront property in the Kawartha Lakes.
Generally, properties with a larger than average DOM value will command lower prices because a perception exists that the property may be overpriced or less desirable. It is important for sellers to work with their listing agents to monitor their competition and adjust accordingly.
The other use for this statistic is to allow prospective home sellers an idea of how long it may take to sell a property.
DOM will factor into a buyer’s offer strategy. If a property has been lingering on the market, it is likely due to price. Although buyers may not understand the seller's motivation, they may be able to get the property for a better price.
If the listing has been removed from the market and re-listed, the DOM clock starts at 0. Your agent will have to do a bit of digging to get an accurate understanding of the property’s true history.
Note: DOM is also affected by macro economic conditions such as job opportunities, interest rates and general economic confidence. Longer DOM generally indicates a buyer's market where as shorter DOM will most times suggest a seller's market.