Understanding how long properties linger on the market can help you find the best investment deals and avoid hidden pitfalls. Days on market is the number of days a property is actively listed before it goes under contract or is sold, and it can reveal both market trends and the desirability of a specific property. As an investor, this metric is a powerful piece of data that can guide your strategy for both buying undervalued assets and timing your sales.
Learning how days on market is calculated and what factors influence it can make you savvier as you evaluate leads and opportunities. Slow sales may point to overpricing, location issues, or problems with the property itself, while unusually short days on market could mean strong demand or possible underpricing. Some sellers even use tactics to reset days on market and make listings appear more desirable, which is important for you to recognize.
Key Takeaways
- Days on market helps investors assess deal potential.
- Calculation and influencing factors affect interpretation.
- Watch for tactics that can manipulate the metric.
Understanding Days on Market
Days on market (DOM) can reveal significant insights about a property’s demand, pricing strength, and potential weaknesses. For investors, understanding how DOM is reported and interpreted allows you to make informed decisions and spot both opportunities and risks.
Definition and Importance
Days on market, often referred to as DOM, measures the number of days a property is actively listed for sale on a local MLS (Multiple Listing Service) until it goes under contract or the seller accepts an offer. Variations can exist, including ADOM (agent days on market, tracking time with one agent) and CDOM (cumulative days on market across all listings and agents for the property).
Knowing a property’s DOM helps you evaluate whether a listing is stale, overpriced, or perhaps offers room for negotiation. A high DOM may indicate there are underlying issues with the property or the asking price, while a very low DOM could suggest high demand or a hot market.
Investors often watch median days on market in a specific market to understand broader market trends and seasonality. Sharp increases or record highs in DOM might alert you to changes in market momentum or buyer sentiment.
How Days on Market Is Calculated
Days on market is typically calculated by counting every calendar day from the moment a listing appears on the MLS until it moves to a pending or under contract status. This calculation resets if a property is taken off the market and relisted, although some MLS systems now track CDOM to counter this reset tactic.
Be aware real estate agents or sellers might try tricks to reduce the apparent DOM, such as temporarily withdrawing and relisting a property to make it look “fresher” to buyers. Monitoring both DOM and CDOM—or asking your agent for these numbers—prevents you from being misled.
Different MLS rules can affect how DOM, ADOM, or CDOM are measured and reported. For investors, understanding these distinctions ensures you have an accurate picture of how long a property has truly been available.
Impact on Home Values
DOM has a direct effect on negotiating leverage and final sale prices. Properties with longer DOM often attract lower offers, as buyers assume there’s a reason it hasn’t sold. This can present you with a negotiation advantage—especially if you spot issues holding up the sale that are easily fixed.
Short DOM, particularly in areas with low median days on market, may require you to act quickly and offer competitively. However, a sudden spike in area DOM, or a record high, can point to a cooling market or growing inventory, allowing for more selectivity and less pressure.
For investors, tracking changes in DOM and comparing individual property DOM to local market averages helps prioritize acquisitions, improve offer strategies, and time sales for peak value. Review DOM trends using resources like Bankrate’s days on market explanation to strengthen your assessment of any investment property.
Factors Influencing Days on Market and Data Privacy
Market demand, seasonality, and economic trends greatly affect how long properties remain active listings. For example, high buyer demand in a low-inventory market usually results in shorter days on market, while an oversupply may cause listings to linger.
Listing status changes, such as “active,” “pending,” or “sold,” reset or freeze the days on market count. Some sellers may temporarily withdraw and relist a property to reduce its visible days on market, a common tactic to attract buyers.
You can analyze trends in different neighborhoods or asset classes using search data and market analytics tools. These resources provide insights into price movement, competitive listings, and recent local sales.
Role of Pending and Sold Dates
The period between a listing going “pending” and reaching its sold date can distort actual market exposure. Days on market typically stop counting when an offer is accepted and the status becomes pending, but delays often occur during closing or due diligence.
Investors need to assess how quickly comparable homes move from active to pending and finally to sold. This timeline affects your negotiation power and pricing strategy, since slower markets may present opportunities to submit lower offers.
Tracking the precise dates helps you understand true market liquidity. Reviewing these timestamps can also reveal if properties fall out of contract and return to active status, which can signal hidden issues.
Active Listings and Analytics
Active listings represent properties still available for sale. Monitoring these allows you to spot market shifts and identify properties with extended market times.
Applying analytics to active listings involves using search filters, content measurement, and audience research to uncover patterns. Look for clues like price reductions, changes in listing photos, or updated descriptions, which might indicate increased seller motivation.
Location-specific analytics are valuable. Geolocation data lets you focus your search in promising areas and adjust your buying strategy based on neighborhood trends. Advanced analytics can also predict which listings are likely to move quickly or linger.
Protecting Personal Data in Real Estate Transactions
As an investor, you often need to provide personal data for due diligence, contracts, and financing. Websites and platforms you use may collect information through cookies, IP addresses, and tracking tools, sometimes for personalized advertising or service development.
To protect your privacy:
- Review privacy settings on listing websites and investment platforms.
- Only provide data to authenticated, secure portals that use strong security measures like encryption.
- Consent to data collection only when necessary, and be cautious with platforms that request unnecessary personal information.
Safeguarding your data helps prevent spam, limits unauthorized use of your information, and reduces the risk of data breaches. For more on current privacy trends in real estate and what organizations are doing to protect investor data, review this overview of factors influencing data privacy trends.
Frequently Asked Questions
Days on Market (DOM) is a crucial metric for assessing how desirable a property is, how competitive a location can be, and when pricing adjustments become necessary. Understanding how DOM is calculated and interpreted helps you make informed decisions as an investor.
How is ‘Days on Market’ calculated for real estate listings?
Days on Market is the total number of days a property is listed for sale in the multiple listing service (MLS) until a contract is signed. The count usually begins on the listing’s first day and stops when the seller accepts an offer.
Some sellers may try to reset the DOM by removing and relisting a property, but MLS rules often prevent simple resets from disguising prior market exposure. Knowing how DOM can be manipulated helps you recognize when a property has lingered despite changes.
What factors influence ‘Days on Market’ for residential properties?
Location, pricing strategy, market demand, home condition, and even the choice of listing photos can all increase or decrease DOM. Properties priced higher than comparable sales tend to stay listed longer. Homes in areas with more competition generally sell faster.
Seasonal market trends and interest rates also play a role. Low buyer activity often means longer DOM, while high demand can drive it down.
How can ‘Days on Market’ data predict real estate market trends?
A rising average DOM often signals a cooling market or oversupply of inventory. Steady drops in DOM can indicate buyers are competing for fewer available homes, hints at a seller’s market, and can prompt investors to act quickly.
Monitoring days on market trends helps you forecast price shifts, spot investment opportunities, and recognize market cycles.
What does a low ‘Days on Market’ figure indicate about a property?
Low DOM typically points to high demand or an attractive asking price relative to market value. Properties with low DOM can be more competitive, and bidding wars might occur.
For investors, quick sales can mean you must act fast if you intend to make offers on similar properties. Be aware that a very low DOM could also flag an aggressively priced home, which may not have much room for negotiation.
How does ‘Days on Market’ vary by different zip codes?
DOM can differ widely between zip codes due to local supply and demand dynamics, school district reputations, and neighborhood amenities. High-demand neighborhoods often see homes sell much faster.
Zip codes with fewer buyers or significant inventory may have higher DOM, impacting your offer timeline and negotiation leverage.
What impact does ‘Days on Market’ have on pricing strategies for homes?
A high DOM can trigger sellers to consider price reductions or make property improvements to attract buyers. Investors targeting properties with longer DOM can sometimes negotiate better purchase terms.
On the other hand, a low DOM often means sellers are less likely to negotiate, especially in fast-moving markets. Tracking how DOM affects pricing strategy can help you spot when to act aggressively and when to hold back.
Want to know what properties banks are about to list?
Learn how to find deeply discounted properties. Get instant access to pre-foreclosures, REOs, and short sales updated daily!
Are you a contrarian investor with the foresight to spot opportunities where others see only chaos?
Rental Property Management in a Market Crash is your essential guide to navigating turbulent economic waters. Learn how to capitalize on market downturns that inevitably occur, drawing parallels between the Global Financial Crisis of 2007-09 and current market conditions.
This book offers invaluable insights into the dynamics of the housing market during a downturn, equipping you with the knowledge to make informed decisions and build a resilient investment portfolio.
Don’t just weather the storm – learn to thrive in it. Get your copy now from your favorite bookseller:
- Amazon as an ebook
- Books2Read for Apple, Barnes & Noble, Kobo, Scribed, and 8 more sellers with both eBook and paperback options available
- Payhip as a downloadable PDF
Ready to take your business to the next level?
- Subscribe to our newsletter
- Visit the learning center
- Learn more about our consulting services
