The “days on market” metric can help you make better decisions on either side of a real estate transaction. Homes are selling faster than ever in this market: In February 2022, the average length of time a property stayed on the market was just 18 days, according to the National Association of Realtors. Here’s what you need to know about the number of days a home takes to sell, whether you’re a homebuyer or seller.
What does “days on market” mean?
Days on market literally refers to the number of days a home has been on the market, i.e., officially for sale. However, it technically measures only how long the home has been listed for sale by a particular agent, explains Jennifer Green, a Realtor with the Aston Rose luxury brokerage in Florida.
The total time a home has been for sale, regardless of agent, is known as “cumulative days on market.” On many websites, buyers can view this cumulative listing history of the property if the seller previously used a different agent or listed the property as for sale by owner, Green 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. “If most properties in an area are on the market for a short period, that means you’re in a seller’s market. Demand is high, inventory is low and buyers must move quickly to make their decision,” Green says. This scenario likely sounds familiar to anyone currently shopping for a new home.
On the other hand, if 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. 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.
What days on market means for sellers
If you’re on the listing side of things, days on market can help inform your selling strategy.
“Generally speaking, if your home has been on the market for too long compared to other listings in your area, you may need to make a price reduction or offer concessions,” Green 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.
“In some instances, it makes sense to relist with a new agent or new brokerage that’s well-versed in the area you’re in,” Green says. “But in others, it doesn’t. The home may be overpriced. It may need to be staged. It may need to be marketed differently. There are just so many variables to consider. Before you relist the property with another Realtor, try speaking to the brokerage to see how you can make the home more marketable.”
What days on market means for buyers
If you’re a buyer, it can be challenging to score a deal when homes in your area are moving quickly. You can benefit, however, if a listing has been languishing for longer than average. Especially if the home is vacant — if the seller has already moved and is paying two mortgages, they could be particularly motivated, and you could get lucky.
“You may have room to negotiate if the home’s been sitting,” Green says. “But it could also simply mean you’re dealing with an unmotivated seller.” Or one who is stubbornly unwilling to lower their price.
Real estate demand may be starting to cool due to inflation and rising mortgage rates, but the time it takes to sell a house right now is still relatively short. The average days on market in your area is crucial to take note of, whether you’re buying or selling. If a home hasn’t attracted the kind of offers the seller wants in that amount of time, buyers take note — the price may soon be lowered.