You scroll through the multiple listing information, watch virtual tours, click on Google Earth to check out the street view and everything about the home fits your needs. Then, you see that number, the "Days on Market" number, and find out the home has been on the market for 160 days! Your mind races, what's wrong with this house, is it priced too high, why hasn't anyone snagged this great deal?
Its amazing the perceptions that can be created from the number of days a home has sat on the market. As a buyer its easy to assume the worst, I do it myself. However, the truth behind this number is much more complex than one might think. Here's a seasonal and general guide on how to interpret "Days on Market":
End of Winter/Early Spring:
Expect longer days on Market. Because winter is usually the slowest time of year in colder climates like the Philadelphia Region, less buyers are actively looking and most would prefer to settle on a home in warmer more favorable weather. Additionally, homes look their worst in the winter. Everything is dreary, gray and cold. Rather, when Spring roles around, bright colors of leaves, grass and flowers can make a huge difference on the emotions of buyers. Also, expect larger homes to sit a little longer through this period. Typically, larger families aren't going to move in the middle of a school year if they can help it.
My Advice: Give sellers a bit of a break. If a house looks good online, definitely check it out. I've seen some great homes sell for good prices in our market during this period. Overall, don't be thrown by the days on market.
Late Spring/Early Summer:
High numbers of "Days on Market" is a little more concerning. May and June historically have the most settlements of any other months during the year. If a home is pushing 4 - 5 months at this time of year (in an active real estate market), its a pretty good indication that the price is not appropriate for the location, condition and style of home.
My Advice: Do your research. Your real estate agent, and some websites, can provide historic pricing information on listing homes. If the seller looks to be actively adjusting the price through these months, it would suggest the are motivated to sell, maybe just started at too high of sales price. If the pricing has had little change over the period, make sure you have your agent contact the selling agent. You might find out that the seller is willing to negoitate, but doesn't want to show a lower price on the listing. Overall, if you have interest, don't dismiss a home.
Higher days on market is expected. Depending on your location, the Fall can be great or slow. The end of Summer typically has buyers a bit distracted by things like school and getting back from vacation. There's about a 2 month window from September to October where we typically see a bump in sales, but once into November, the holidays take over.
My Advice: Give a house a chance, you might be surprised the kind of deals you'll find this time of year. Seller's start to get motivated to be out of there homes and moved before the holidays begin.
Other things to keep in Mind
- Days on market numbers have creeped up with the slow down of the economy
- If the average days on market for sold properties is much less the current active listings average, this means buyers are jumping when the right homes pop on the market at the right price. For example, there is a gap of about over 50 days between homes sold (94 days average in the last 6 months) and homes on the market (151 days average) in Haverford Twp. The good homes are selling quick.
- If a home is way over the average of the local market, several months, its priced incorrectly.
- If a home has sat on the market for a long time and the pictures online are bad, you might want to check that one out. Poor marketing can kill the sale of a good home.
- If you like the house, forget about the Days on Market. Everyone has different taste and the right home for one person is the wrong home for the next.