Average "Days on Market?" Who CARES?

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Education & Training with Sell with Soul

Why do we put such stock in the Average Days on Market (DOM) statistic in our MLS's? I suppose it might be meaningful if YOUR average DOM is much less than the overall DOM, but otherwise, I believe it's a totally soldmeaningless number.

If I were to run a market analysis of all the 1920's Bungalows that have sold in my market (NW Denver) in the last three months... (okay, wait a sec, I'm going to do that right now... BRB).

Okay, I ran my analysis. Had to go back six months 'cause the last three have been kinda quiet around here.

The DOM of my subject search ranged from 2 days to 171 days. The average DOM was 53. However, out of 21 properties, seven sold in under a week (five of those in less than 3 days), eleven in less than three weeks, while five took over 100 days to sell. Only three of the 21 properties had a DOM of anywhere close to 53.

So, when a seller asks me what the average Days on Market is in Northwest Denver, I tell them "I don't know" and explain why. I then explain why my goal is to sell their home in 30 days or less (obviously it's perfectly do-able in my market), and how I'm going to do that.

But maybe that's just my market. Do you feel that the DOM statistic is meaningful in yours? If so, please explain!

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Rainmaker
485,057
Jennifer Allan-Hagedorn
Sell with Soul - Pensacola Beach, FL
Author of Sell with Soul

Okay, I hear ya. But if you have DOM stats all over the board, how is this figure meaningful to a seller in his planning process? As described above, the average DOM I came up with was 53, but hardly any of the solds had DOMs of anywhere near that number.

Jan 07, 2009 12:30 AM #8
Ambassador
896,190
Larry Bettag
Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 - Saint Charles, IL
Vice-President of National Production

Good point here....plus with people de listing their homes and then throwing them back on as a new listing....you're right....does it really matter?

Jan 07, 2009 12:37 AM #9
Rainmaker
279,643
Don Gockel
NextHome The Gockel Group - Palmdale Lancaster Quartz Hill - - Palmdale, CA
Realtor, Broker, GRI - Antelope Valley Real Estate

DOM in of itself is a bad way to judge the market because as marketing people we know the power it holds. We know that NEW things draw attention. This leads to agents wanting their listing to look NEW every so ofter. In my local MLS we call that "churning." In other words you are "churning" the same old listing back into the system to make it look new and that disrupts statistics and there is vurtually no way to stop an agent from doing it.As we know, when a listing first comes on the market is when it gets the most attention, and attention is what sells. Our MLS (Rappitoni) provider was able to help, they added what is called CDOM (cumulative days on the market) that continues the count if the listing was not off the market for 30 days. Our "days on the market" field looks like this:

                     DOM
                   22/285

Meaning is has currently been on the market 22 days, but a cumulative total of 285. This simple fix has stopped that the "take it off the market and put it back on to look new" issue. I also has helped us understand the REAL number of days it takes to sell.

Jan 07, 2009 12:44 AM #10
Ambassador
687,240
Ann Allen Hoover
RE/MAX Advantage South - Hoover, AL
CDPE SRES ASP e-PRO Realtor - Homes for Sale - AL

Jennifer, you make a good point.  I tell sellers what the average is, but then I tell them what we need to do to beat that.

Jan 07, 2009 01:42 AM #11
Rainmaker
784,820
Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

I think the DOM is important if people want a short term listing.  If  it really takes 170 days to sell a home, do you want a 3 month listing?  But then again, if it is priced correctly it will sell quickly... So the long marketing time is often a by product of lazy, weak listing agents that DONT say "no" to the over priced listing!  so is that really reliable data?  I think not!

Jan 07, 2009 03:22 AM #12
Rainmaker
358,842
Alan Brown
Coldwell Banker Montrose Colorado - Montrose, CO
29 Years of Real Estate Experience .

Like a lot of stats in the MLS you can manipulate them to show any thing you want. You can leave out some comps to show a different amount of time on the market, the numbers are a guide, I am with you price your home to sell in 30 days or less regardless of the market conditions.

Jan 07, 2009 04:42 AM #13
Rainmaker
1,042,073
Kevin J. May
Florida Supreme Realty - Hobe Sound, FL
Serving the Treasure & Paradise Coasts of Florida

Jennifer, statistics can drive you crazy but you could run a comparison DOM in concert with a LP/SP ratio then the numbers will make more sense when explaining it to a Seller.  Essentially it should show that homes that sell quicker are within maybe 96% or 97% of LP.  The longer it takes you might see 88% of LP.  Right pricing sells homes!    

Jan 07, 2009 06:04 AM #14
Rainer
62,282
Denise Gray
Realty World Alliance - Wichita, KS
Realtor SRES, Wichita Kansas Homes

I tell them the home they are looking at DOM but as far as averages I say some sell in 2 days some sell in 180 days. Depends on location, price, condition, layout, and Holidays.

Jan 07, 2009 07:55 AM #15
Rainer
35,968
Andrea Palmer
Jones & Co. Realty 239-333-5556 - Cape Coral, FL
Phone 239-333-5556

Jennifer, very good point! I will say"I don't know" next time they ask me.

Thanks

Jan 07, 2009 08:05 AM #16
Rainer
93,146
Zane Coffin
Century-21 Homestar - Geneva, OH
(Geneva Ohio Real Estate Agent)

Jennifer, I just want to say that I'm new to active rain...and I have been searching for some groups that I like and this is by far one of the best groups for info and ideas that I have found...thanks for gathering some of the best bloggers on active rain I look forward to reading more....peace zane

Jan 11, 2009 10:12 AM #17
Rainmaker
485,057
Jennifer Allan-Hagedorn
Sell with Soul - Pensacola Beach, FL
Author of Sell with Soul

Hey Zane - welcome! If you like this group, you might try my SWS forum - it's definitely the soulfulest of the soulful... www.sellwithsoul.com/forum.

Jan 11, 2009 11:12 AM #18
Rainmaker
180,011
Heather Fitzgerald
REALTY WORLD-Harbert Company, Inc. - Greenwood, IN
REALTOR Greenwood Indiana Real Estate

Our DOM is important for our REO listings, Asset Managers, new companies we are getting our foot in the door with, etc...

Jan 13, 2009 03:49 AM #19
Rainmaker
33,518
Chuck Capan
REMAX River Cities - Moline, IL
REALTOR Licensed In IL. - Moline Homes Quad Citie

When I show clients anything that may contain DOM, a CMA for example, I never talk about it unless the client brings up the question. Then I always tell clients that the DOM is a fairly WORTHLESS statistic that can be manipulated by Realtors...no need to explain the the "choir" here how to do that.

Heck I am guilty of the manipulation...just in the past 2 weeks I have re-listed several properties.  New photos are used...to make sure the pics have snow on the ground rather than green leaves on the trees.

Jan 13, 2009 04:31 AM #20
Rainmaker
812,970
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

I'm with Denise on this one.  The (average) DOM in your case, and in many others, is not at all a good indication of the average sales time of a particular type or size of home.  There are too many other variables anyway, such as location, condition of the home, list price, and layout of the home. 

What you really need to find out is how the 7 homes sold in under a week, and why 5 similar homes took over 100 days to sell.  So when a seller asks you what the average Days on Market is in Northwest Denver, you can tell them it ranges from less than a week to more than 100 days depending on this, and this, and this.  Then you tell and show them how they can get their home sold in 30 days or less.  That's where the information is important, not in the actual numbers.

Jan 13, 2009 06:32 PM #21
Rainmaker
485,057
Jennifer Allan-Hagedorn
Sell with Soul - Pensacola Beach, FL
Author of Sell with Soul

Troy - Very well said!!!

Jan 13, 2009 10:30 PM #22
Rainmaker
180,472
Kevin Vitali
EXIT Realty- Massachusetts Short Sales & Residential Sales - Tewksbury, MA
Helping Massachusetts Home Buyers and Home Sellers

DOM are useful in the sense of of a market as a whole.  They are important to see where the trend is headed.  From 2005 to 2007 days on market climbed showing a slowing market.  I also tell clients tha what they can expect to sell their home.

Jan 14, 2009 01:09 AM #23
Ambassador
772,101
The Somers Team
The Somers Team at KW Philadelphia - Philadelphia, PA
Delivering Real Estate Happiness

I really agree with Troy's comment.  There is something to be said in terms of analyzing more in terms of why some of them sold fast and others did not.  I would imagine that the majority of that is pricing which could illustrate a great point to the seller.  And then the same analysis to the ones that took longer.  Either way, I think the DOM is an important number as it helps agents to know what is a safe amount of time to have on the listing contract.  This may not apply as much in your area but if the average house takes 5 mos to sell, an agent should not take a 3 month listing contract.  I also agree with Jim's comment - we also have a PMP statistic which shows TOTAL days on market from prior listings as well which I think is also helpful info...

Jan 18, 2009 04:53 AM #24
Anonymous
James DFWProperties.net

In our market the MLS has DOM and CDOM. The "C" is for cumulative days on the market and includes all listings for a property over the past several months stopping Realtors and sellers from canceling and re-listing to keep the DOM low.

Jan 20, 2009 11:47 PM #25
Anonymous
Turk
Wow! Great thiinnkg! JK
Jan 06, 2012 04:53 PM #26
Anonymous
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Jan 09, 2012 04:48 AM #27
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Jennifer Allan-Hagedorn

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