Is “Days on Market” (DOM) Important?
The answer is…..sometimes. The number one cause of a high DOM is overpricing. The seller may be misinformed about pricing conditions in their market sector or the overpricing may be intentional. Some sellers like to price high and “test the market” to see what they can get. It is very difficult to facilitate a sale with an unmotivated seller!
There are other causes though, so buyers shouldn’t shy away from properties with a high DOM. Sometimes the property isn’t available to show because of renters or some other factor. A property can be in bad shape and not be showing enough. It can also be that a property is not being marketed in the right way for the type of listing it is. None of those factors make the property less desirable at the right price, just hard to find and get into.
Statistics can be tricky if the factors underlying them are not known. The average DOM for residential sales in our MLS over the last 12 months has been 253, but that number would have been significantly lower if the Deepwater Horizon Oil Spill had not occurred in April. The market was chugging back to life and the Oil Spill caused it to go cold. The Deepwater Horizon effect showed in June with no sales in the entire month and then very low sales all the way through the fall.
Once the spill was contained and people became more confident in the condition of the coast, sales rebounded in December with 11 closings in the MLS. Even with the oil spill DOM in 2010 at 280 was lower than DOM in 2009 at 309. Another sign we may be "bouncing" off the bottom!