Days on Market: Why does it matter?
How long a home takes to sell from the day it goes up on the market to the day it sells firm is referred to as days on the market. As buyers and sellers, we can use DOM as a tool to provide metrics on the amount of time the property sells for in a particular neighbourhood, street, or condo building. In this post, I’ll show you how DOM correlates with sale price vs. list price. I’ll explain what DOM reflects to buyers, and why that’s important for sellers.
Some evidence suggests that the longer a home sits on the market, the less chance there is of getting full asking price. I believe there's much truth to that statement.
To keep it simple, we’ll analyze the numbers for the last quarter of 2017, in C02 Yonge-St.Clair, and how the DOM affected the sale price of the homes in the
area outlined here.
Here we can see the different housing types, their average/median selling prices, average days on market and the average sale price to list price ratio.
Let’s compare the bottom two graphs. In this case, it’s clear that the shorter time frames that the property was on the market, the higher the sale price was to the list price.
It’s important to note that these are average numbers. There are many things to consider when comparing different types of properties to determine its value or how long it might take to sell. The product, current market conditions, pricing strategies, how the property shows, and other important factors will influence the amount of time properties take to sell.
From my experience, the longer a home sits, the more ammunition buyers have to low-ball offer. I believe there’s a psychological effect that higher days on the market has on the buyer’s mind.
Buyers will wonder whether there’s something wrong with the property. They might suspect that it’s overpriced, or that it needs extensive repairs. Don't let your property fall into that trap.
Pricing it right from the start will ensure that you get the maximum exposure that your property deserves. Using this strategy, you can be sure that your home will sell at, or close to, asking price. When properties are overpriced, require price adjustments or to be re-listed, it’s likely that the home will sell for less than asking price.
If you’d like more information on your home’s particular neighbourhood statistics, I’m happy to share those statistics with you. Let's connect
As a buyer, there are ways to prepare yourself for market conditions where the days on market are low, and the competition is fierce.
Get yourself acquainted with the marketplace before actively shopping for property. Save yourself time and stress by getting your pre-approval done early. Is a lowball offer the right move? Make sure that you’re aware of how long similar properties to the ones you’re shopping for are taking to sell.
If you’re curious to know how long properties are taking to sell similar to the ones you’re looking to purchase, let’s talk about it.