Home Selling FAQs: Why Do Days on Market Matter?
Buyers ask the question about days on the market and this factors into their decision about how to price their offer. Sellers need to be very sensitive to their days on the market and not be afraid to drop the price on their home before the listing gets stale.
Why Do "Days on Market" Matter?
If you are thinking of selling your home, you will first want to do a Comparative Market Analysis (CMA) of your home. This will give you a price range of the most likely sales price for your home.
One of the other metrics that you will want to pay attention to is the Days on Market.
What does Days on Market mean? Simply put: Days on Market for sold properties is defined as the number of days from the time the home is first listed until the time when a valid contract has been signed by both buyer and seller. (At which point the house is "Under Contract") Days on Market for actively listed properties will continue to tally until the property goes Under Contract.
So,why should this matter? When examining the comparable sold properties in your area, it is important to know how long your home is likely to be on the market. If the comparable homes in your are going into Under Contract status fairly quickly - say less than a month, it will paint a clear picture of what buyers are willing to pay for a home like yours.
If comparable homes are selling very quickly - a week? 2 days? - this usually means that the market is heating up, and you may be able to ask a higher price.
On the other hand, if comparable homes are taking a lot longer to sell, after multiple price drops, this will also paint a pretty clear picture.
Let's say a home very similar to yours sold after 6 months, and saw 3 price drops. You and your Realtor will need to examine all of the data available to determine why it seemed to take so long. Was it a short sale or foreclosure situation? Was it obvious that the home needed major updating or improvements? Although it is very similar to your home, is there a reason why this particular one is very different (e.g. the driveway doubles as a major highway, or it is adjacent to a brothel?)? If the answer to all of these questions is "no", then the final price is likely to be your sale price as well. In this case, if you are looking to sell very quickly, you may decide to list your home at a lower price than the comparable sales in your area.
Finally, it is important to examine Days on Market for homes like yours if your home has unusual characteristics, or is in a higher price bracket. In the Adams County real estate market, homes listed for $700,000 or higher that sold over the past 6 months went under contract after an average of over 300 Days on Market! If your home is in this category, you may be in for a longer wait, although this number is much better than it was a year ago, when there was over 3 years worth of inventory in this price category (Source: Market Data Trends, Lon Welsh, Your Castle Real Estate).
Remember that every neighborhood is unique. To find out what the Days on Market are for homes like yours in your area, be sure to consult with a Realtor who specializes in your area. To find out more about what the Days on Market are for your Adams County home, call me at 720-341-5235.
Jennifer Prestwich, REALTOR®
Your Castle Real Estate
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