Whether you’re a homebuyer or seller, understanding days on market can help you make better decisions on either side of the real estate transaction. Here’s what you need to know about the timeframe a home is on the market.
What does ‘days on market’ mean?
Days on market refers to how long a home has been listed for sale — but the number of days is based only on how long the home has been listed by a specific agent or other representative, not the total time it’s been on the market. That’s known as cumulative days on market, explains David Roth, a real estate agent in Idaho Falls, Idaho.
Most of the time, you’ll see days on market, not cumulative days on market. However, on listing websites, you can see how long a home has been listed and on what dates, so you can readily find out cumulative days if you’re interested, Roth points out.
Days on market is one of the best indicators of whether you’re in a buyer’s market or a seller’s market.
“A shorter time on market indicates that we’re in a seller’s market because there’s high demand by buyers and not much inventory,” Roth says. “Right now in my local area, most properties aren’t on the market that many days.”
Likewise, when the time on market is longer, that can indicate a buyer’s market. When houses take longer to sell, it can be a reflection of lower demand and buyers may be able to be a bit choosier — and sellers might need to be more accommodating, including recognizing that their home might not be worth what they think it is.
“In some cases, you might see a difference based on the demand in a certain area and price range,” Roth says. “So it can be a seller’s market in one price range, while being a buyer’s market in another price range.”
How days on market impacts a sale
If you’re on the listing side of things, days on market can help inform your selling strategy.
“If your property is on the market longer than the average days on market for your area, it usually means you’re asking too much and you might need to make concessions,” Roth says. “This can mean lowering the price or offering various sweeteners to attract buyers.”
If you’re a buyer, it can be challenging to score a deal if homes are moving quickly in your area. You can benefit, however, if a listing has been languishing for longer than average. A home that’s been on the market for a long time likely won’t be the best deal out there, Roth acknowledges, but you might be able to turn it into a good buy.
“I especially look for homes that have been on the market for a long time and are vacant,” Roth says. “If they’ve already moved and are still paying the mortgage, it’s costing them and they could be more motivated to sell.”
On the other hand, if the seller is still living in the home, you might want to move on if the house has been listed for a while.
“In that case, the seller might just be waiting around to get a higher price and might not be willing to come down,” Roth says.
Should you relist?
If your home hasn’t sold in the typical days on market for your area, you may be considering relisting it. This generally isn’t the route to take unless you’re making big changes to your home to make it more appealing to buyers.
“If you’ve made some renovations or remodeled the home and it’s been off the market for a few months, sure, relist,” Roth says. “For the most part, your best bet is to get a good feel for your current market and price your home so it doesn’t spend too much time on the market.”
Roth adds that if you’ve dropped the price, you might see your home automatically relisted in a new price range depending on the listing website. Still, most homebuyers start their search online, and can find the history of the listing regardless.
“You can see if someone has taken it off for a couple of days and is trying to pretend like it’s a hot new listing, when it really isn’t,” Roth says.