Days on Market – What Does it Mean to Home Buyers?
Understanding local housing market statistics is an important key when buying a home in Arizona. Most buyer only pay attention on median sold price and average sold price. Another statistic that is important in real estate is Days on Market, or DOM. The number of days a home spends on the market directly affects the price of a home. Plus, this information can be used to the buyer’s benefit to negotiate a lower price.
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What does DOM means?
“Days on market” is the number of days that a property has been listed on the local multiple listing services (MLS) until a seller has accepted an offer and signed a contract for the sale of the property. It can also be referred to as “time on market” or “market time.” DOM is basically a measure of how long a house takes to sell and is used as a key metric by buyers and real estate agents.
In Arizona MLS, there are two Days on Market calculations. Cumulative Days on Market (CDOM) is the number of days the listing has been live in the MLS. Agent Days on Market (ADOM) is the number of days the property has been listed with an individual agent. When browsing home listings, buyers should always take a look at the number of days on market to determine how other buyers are reacting to the property.
Why DOM matters to buyer?
DOM is used to compare these averages over time and over neighborhoods and areas. This average tells us how the market is doing in general. If it is taking four months to sell a home compared to two months at the same time a year ago, we can tell that the demand has slowed down. If it takes two months to sell a home in one zip code or neighborhood, and it takes four months on average in another area, then we know that that neighborhood is in demand.
How knowing DOM helps a buyer?
When buyers notice a home that has been on the market for 120 days, and the average DOM for the neighborhood is 60 days, they’ll wonder what’s wrong. Buyer may think that the house is priced too high, or there is something wrong with the condition, or both. If you look closer and see that the home has not had a price reduction since being on the market, you might deduce that the seller is not realistic in their pricing, or not very motivated to sell. Likewise, when you see a home that has been on the market for 60 days and has had 3 price reductions, you can accurately guess that the seller is motivated. A motivated seller is much more likely to appreciate a fair offer than an unmotivated seller.
How buyers can use DOM to their advantage?
While a high DOM can be a sign to buyers that something is wrong with the house, it can also indicate a potential bargain. Sellers who haven’t received offers and who may be open to a dramatically lower offer. Because the last thing sellers want is for their house to get stale on the market.
Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Phoenix AZ and surrounding area, we hope you will consider us. Contact us today for complimentary consultation.
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