Buyers like to use a high number of days on market as a tool to eliminate a home from consideration, or as reasoning for a low ball offer. There has been some discussion around the web recently (here and here) about listing agents withdrawing a home from the MLS and immediately re-entering it to make it look like a new listing. I myself have been guilty of doing that in the past. However the time has come for us to educate buyers as to why days on the market is an irrelevant statistic. Let me begin by dispelling two myths.
"This home has been on the market for a long time. It has to be overpriced."
At what point in time does it become overpriced? Sixty days? 120? If you are looking at two very similar houses, priced exactly the same, with the only difference being one has been on the market a week and the other for six months, are they both overpriced, or just the one that has been on the market longer? My point is that if it is overpriced, it is overpriced on day one of the listing. If you as a buyer are working with a competent real estate professional, they should be able to show you, even on day one, an analysis with a reasonable determination as to the market value of a property. If you are not working with an agent, then an appraisal can show you. Unless you are in a market with rapidly falling prices, the determined value will be the same, no matter how long the house has been on the market.
"This home has been on the market a long time. The seller must not be motivated to sell."
Circumstances are different for every seller, and there are multiple reasons why a home that has been on the market for any length of time is still there. Fairly common in today's market is a situation where a seller doesn't have any leeway in their price and is selling at near what they paid. Another reason is they may have selected a poor listing agent. Take for example a listing that has been on the market for 150 days. There is no way to determine, just by looking at days on the market, whether a home is still on the market because the seller has refused to budge on their price because they don't have to sell (read not motivated), or whether they are desperate to move but can't negotiate on price because they owe more than they can sell it for.
What's the lesson for buyers? Don't judge a home by the number of days it has been on the market. Focus instead on price, location, and desirable amenities. Days on market can be a useful number for a seller to determine what a realistic time to sell will be, but it is of little or no value to a buyer.
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