Average Days On Market....Is It A True Indicator?

By
Real Estate Agent with Prestige Homes of The Tri Cities, Inc. CALL....423-341-6954 TN and VA
http://actvra.in/hFs

Average Days On Market....Is It A True Indicator?

I get this question all the time and it got me to thinking...Are average days on the market a true indicator? In my opinion no!

Most people when they see that a property was on the market for 400 days that it just wasn't a nice property ot that it was way over priced.....In my opinion that's just not the way we should look at it!

I'm just one of thousands and thousands of real estate agents across the country and if I have underlying circumstances that keep my properties on the market for extended periods them I'm sure every other agent does also!

Key reasons average days on the market is not a true indicator!

  • An agent sells a FSBO...puts it in the MLS as sold before print.....it shows up as on the market 1 day!
  • You list a property as part of an estate sale....there is a minor involved...you get acceptable offer in a few days but, you have to get the price court approved before you can proceed. If you've ever had one of these you know it can take at least an extra 30 days sometimes to make all this happen.
  • You list a home and it goes under contract very soon and set to close in 30 days. The buyers are approved, all inspections go well and the appraisal come in over asking price......TWO DAYS before closing you get a call that the bank had ordered a desk review on the appraisal and it came in $50,000...YES $50,000 under the one that just came in 2 weeks earlier. Now we are 2 weeks past our agreed upon closing date....the buyers are going through another local bank because the appraiser who did the desk review totally botched the review up.
  • You're seller accepts an offer on their home contingent on the buyers home selling and closing within 90 days....Then the buyers home doesn't sell and you put your sellers home back active and have to start over!
  • You have a buyer and a contract on a home....everything goes as planned....the loan officer tells you everything's good the whole way through up until 3 days before closing....this loan officer even encouraged my buyers to buy some of the furniture before we closed....then 3 days before closing she calls and says it's not going to close....
  • I had two condos listed and had a buyer (Paying cash and wanting to close asap) within just a few weeks...it was an estate sale with a minor involved so we had to go to juvenile court and have the prices approved...then the HOA decided that they only wanted them sold as owner occupied....the buyer was buying them to rent as one was already rented to a lady who had been there 20 some years. To make a long story short....It took over a year to close these units...6 court appearances later... we won...BUT in the meantime....1. The buyer passed away 1 month before the judge ruled in our favor. 2. The seller spent $7,000 in repairs he wouldn't have had to spend if it had closed as per the contract. 3. The seller had to pay $15,000 in attorney fees to fight it. SO....after getting them under contract it took 14 months to get them closed! Luckily the buyers son continued with the purchase when his dad passed away!

The above situations are just a few of the reason I personally feel that you can't put much weight on the average days on market!  There are just so many factors that make this number so unreliable!

It's just not a true indication of the properties themselves as a whole!

 I think the best way to answer this question is.....I personally don't think it has anything to do with the homes in particular.....it has everything to do with particular situations that we will never know of!  What I'm trying to say is that when you see a property that's been on the market for a long time just look further than the days on market.....you just never know why!

Just something to think about!

And Remember For All Of Your Real Estate Needs In The Bristol Tn Va and Surrounding Area....GoWithRobThomas.com
or Give Me A call at 423-341-6954

>>>>>>>>>>>>

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Waffles

 

And Remember For All Of Your Real Estate Needs In The Bristol TN/VA and Surrounding Area....GoWithRobThomas.com 
or Give Me A call at 423-341-6954

 

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"REALTOR® of The Year for 2011"

 

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Remember that life is not measured by the number of breaths we take ....but by the number of moments that take our breath away!

Have a great day!

Rob

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Most of all, You need to know that I truly love what I do! 

No one anywhere will work harder or smarter for you than I will!

Give me a call today so we can get started and make your dreams come true! 

 

If you or someone you know is thinking of Buying or Selling Property in the Bristol, Bluff City, Blountville, Piney Flats, Johnson City, Gray, Jonesborough, Abingdon, Kingsport, Elizabethton or anywhere in the Tri-Cities Tennessee-Virginia area---or if you would just like more information about our area then please give me a call at 423-341-6954, visit me at GoWithRobThomas or email me at RobThomas@GoWithRobThomas.com

Licensed in Tennessee and Virginia

 

Prestige Homes of The Tri Cities, Inc. 701 Bluff City Hwy Bristol, TN 37620

423-341-6954 or 423-217-0346

Information and Photos of this blog are the property of this author and are only opinions or personal views and may not be republished without the permission and written consent of Rob Thomas. Information contained in this blog may not be relevant at this time. The opinions and views are not guaranteed and may be based on information collected from several sources, and may be time sensitive, other comments, market reports and stats may be from MLS statistics. It is not necessarily representative of the views or opinions of Prestige Homes of The Tri Cities, Inc.  Information on properties for sale may have changed, expired, been withdrawn or may have been listed with Heritage Homes at Sixth Street Inc.  If posted prior to December 30, 2011.

Go to www.GoWithRobThomas.com for current status.

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Craig Alexander 08/31/2011 10:56 AM
  2. Gayle Barton 09/01/2011 06:34 PM
Topic:
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Show All Comments
Rainmaker
331,235
Rita Fong
RE/MAX REAL ESTATE TODAY, Executive Broker 901-488-9590 - Marion, AR
Realtor - Marion Arkansas Homes for Sale

This is a great post to let consumers know not to assume the house is not good because of how many days it shows on the MLS.  

September 01, 2011 09:55 PM #97
Rainer
112,835
Beverly Femia
Coldwell Banker Sea Coast Advantage - Hampstead, NC
Broker Realtor Stager - Greater Wilmington, NC Are

Excellent post!  "The devils in the details" is one of my favorite phrases. With enough data, averages makes some sense and provide clues to market health but each property is a different story.     

September 01, 2011 10:53 PM #98
Rainmaker
692,519
Clint Mckie
Desert Sun Home, commercial Inspections - Carlsbad, NM
Desert Sun Home, Comm. Inspection 1-575-706-5586

Hello Rob,

And congrat's on the "featured Post" , As I had mentioned in that post. The days on the market are only counted by the days it's been "listed". If the home is on the market for 30 days but it takes another 120 days to get to closing. Then the home was on the market for 150 days.

Unless the buyer is paying as a cash sale then the "waiting" for all the documents really hurt the listings as far as days listed "for sale".

If the media would break out of the Housing slamming they have been doing and simply say that housing sales are on the rise and the future looks bright. Then it would help the housing industry by adding confidence back into the consumers mind. Therefor relating into more home sales through peace of mind of buying a home.

 All the best my friend, Clint Mckie 

September 01, 2011 11:25 PM #99
Rainmaker
148,462
Dale Taylor
Re/Max All Properties New Lenox Illinois - Frankfort, IL
Realtor = Chicago Illinois Homes Townhomes Condos

I want to chuckle every time a buyer asks me how long the home has been on the market.  Thanks for pointing out some very good truths about market time!

September 01, 2011 11:30 PM #100
Rainer
207,815
Gerard Gilbers
Stingray Performance Marketing - Waldorf, MD
Your Marketing Master

To a large degree I would say it is a true indicator! (Yes, I do like to be argumentative or disagreeable on occasion!)  Is it absolutely true that all houses will sell at the average? No, because then it wouldn't be an average, or need one!  Things happen and that is why the average changes. I do agree that there are extenuating circumstances that can skew the numbers, but this is also not a one time occurrence! A contract falls out for whatever reason all of the time, does that make it not average?

September 01, 2011 11:31 PM #101
Ambassador
537,611
Gayle Rich-Boxman Fishhawk Lake Realtor (503)755-2905
Vernonia Realty - Vernonia, OR
"Your Gateway to the Lake" Birkenfeld Oregon

Rob, first off YOU GO, MAN!!!  ActiveRain Daily Drop--woohoo!  You deserve it, friend.  And you didn't even need one picture!  Just great thoughts. Any agent who complains about their current transaction, needs to read through of few of yours and count their lucky stars.

So sad about the buyer passing away....that's one of the tougher things we face in trying to make a difference in peoples' lives.

 

September 01, 2011 11:31 PM #102
Rainmaker
372,361
Dennis Burgess
Total Realty Corp. - Mid Florida, FL
Orlando Property Manager and Realtor

Hi, Rob- and Roll Tide:  The easy answer to your question is "no".  It's always funny, though, how every person that looks at a place and asks the "How long has this place been on the market?" question assumes that a place that's been sitting there x days is ripe for the pickin'.

I wish I had $1 for every time I've told someone that there's absolutely no correlation between the time a place has been on the market and the quality of the place itself.  In my line of work, reasons places sit may be:

Owner has unrealistic expectations- for either rent price or tenants

Applicants are terrible

Combination of the 1st two possibilities

Prospects have unrealistic expectations- for either rent price or "repairs" they feel owner should make

HOA or COA shoots down an applicant or applicants.....and a recent favorite:

The schools in the area have been re-zoned, and the place that was once zoned for an A school now sits slap in the middle of D-school country.

The list goes on, but it's no contest for me:  the answer here is no.

September 02, 2011 12:46 AM #103
Rainmaker
267,176
Paddy Deighan JD PhD
Aston McLaren Inc - Vail, CO
Paddy Deighan J.D. Ph.D

all good points and I ahve noticed that local MLS regions have different polices on "Active Days on Market" versus "Cumulative days on Market"

September 02, 2011 04:48 AM #104
Rainer
26,834
Lawrence Evans
Team Limejuicer/Remax - Germantown, MD

Hi Rob and yes go Vols.  Good post and a subject that comes up almost daily in the life of a Realtor. I have noticed in the past number of years that the days on the market has been more skewed with the increasing complexities of the industry.  Thank you for your post and congrats on the feature.

September 02, 2011 09:02 AM #105
Rainer
123,843
Sylvia Jonathan
Coldwell Banker Platinum Properties - Irvine, CA
Broker Associate, SFR

In our MLS system we can put a listing "on hold" and the DOM will not accrue while not actively listed. The DOM also do not accrue when it is "pending", as in your example with the 90 day escrow. If I see a listing with 400 days on market, there should be the listing agent's brief explanation in the private remarks. Long DOM is not always an indicator of trouble, but it CAN be. Agents representing buyers need to know the "skinny" on the why.

September 02, 2011 12:32 PM #106
Ambassador
389,814
Pam Dent
Gayle Harvey Real Estate, Inc. - Charlottesville, VA
Realtor - Charlottesville Virginia Homes and Horse Farms

DOM is just one of a number of things to look at when considering a property.  Buyers will also look at long days on market and immediately assume that the seller isn't motivated or doesn't want to sell.  Then I shave with them some of the many reasons that a property may have a higher DOM.

September 02, 2011 01:48 PM #107
Rainmaker
808,389
Lyn Sims
RE/MAX Suburban - Schaumburg IL Real Estate - Northwest Suburbs of Chicago - Schaumburg, IL
Schaumburg Homes

Oh, so you mean life happens? I think there are so many factors that have to get taken into consideration. I personally left a listing go because the seller wouldn't change the price after 300 days on the market. Plain & simple I just gave up with a seller that was unrealistic. How many more years before an acceptable offer came in?

September 02, 2011 08:20 PM #108
Rainmaker
577,713
Patricia Feager, MBA, GRI, Cert Negotiations Expert, Military Relo Prof
Keller Williams Realty - Flower Mound, TX
The Little REALTOR® That Could

Rob,

CONGRATULATIONS ON BEING FEATURED! I'M THE 112TH PERSON TO COMMENT- WOW! THAT'S PRETTY AMAZING. THIS IS A WELL WRITTEN POST THAT TRULY DESERVES TO BE FEATURED AND DISCUSSED FOR DAYS AND MONTHS TO COME. WHAT AN OUTSTANDING JOB YOU DID.

SORRY I DIDN'T GET HERE SOONER, BEEN BURNING THE MIDNIGHT OIL. SLEEPLESS IN FLOWER MOUND...

September 03, 2011 01:14 AM #109
Rainer
32,015
Brian Dodds
Coldwell Banker Willis Smith - Oriental, NC - Grantsboro, NC
Sale or Sail? We do both!

Rob - I'm new to the business and were we are excessive DOM is the norm. My answer is to keep absorption rate data readily available and update each month. I find this a much better market indicator.

September 03, 2011 10:27 AM #110
Anonymous
Anonymous
Karen Walls

I was just talking about this to an agent! I get this and I don't place much merit on DOM. A myriad of situations could be not reflected etc. Very good post!!! I also tell Buyers, some just for as long as it will take want what they are asking and not in a hurry to sell period. That thought somehow doesn't occur. The longer the DOM, that almost always in most cases translates to a lowball offer by the buyer and that is just not so. This post is so timely, will frame it!!!!

September 03, 2011 12:59 PM #111
Rainmaker
384,118
Karl Hess
Keller Williams Ocean County - Toms River, NJ
on The Jersey Shore

Statistical anomalies do not overrule statistical significance.  Average CDOM is a strong indicator, at a macro level, of the current market conditions in a given area.

September 03, 2011 01:52 PM #112
Rainmaker
1,077,325
Rob Thomas
Prestige Homes of The Tri Cities, Inc. CALL....423-341-6954 - Bristol, TN
Bristol TN-VA & Tri Cities Agent, ABR, GRI, e-Pro

Thanks to everyone for stopping by.....It means a lot to me and I appreciate all the comments. You all have great points....It's really nice to have a subject that gives you so many views.....Thanks again!

Hope you all have a great night!

Rob

September 03, 2011 06:28 PM #113
Rainmaker
128,113
Mike Henderson
Your complete source for buying HUD homes - Littleton, CO
HUD Home Hub - 303-949-5848

I can't believe nobody stood up for DOM.  It doesn't matter for an individual house it matter for the entire market.

September 03, 2011 11:03 PM #114
Rainmaker
37,355
Terje (Terry) Aaslid
Realty ONE Group - Chandler, AZ
Foreclosed homes / New Homes

As Mike pointed out (post 117) DOM is a great tool for measuring market trends. People like to see if the market is heating up or not.

September 04, 2011 01:03 AM #115
Rainmaker
1,077,325
Rob Thomas
Prestige Homes of The Tri Cities, Inc. CALL....423-341-6954 - Bristol, TN
Bristol TN-VA & Tri Cities Agent, ABR, GRI, e-Pro

Mike.....It's just that there needs to be a disclaimer because it's such a misunderstood statistic......Thanks!

Terje......It's just not a true indicator of all the things that can or do happen that make up this number......Thanks!

Example....Home sells and closes in 45 days after agent C gets the listing......upon further research you find that agent A had it for 6mo and after that agent B had it for 9mo......The true fact being that the home was on the market well over a year but will only show up as 45 DOM.....this is more common than you think.....


Hope you both have a great Day!---Rob

Go Vols!

Game 1 winners over Montana 42-16

September 04, 2011 07:40 AM #116
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Rainmaker
1,077,325

Rob Thomas

Bristol TN-VA & Tri Cities Agent, ABR, GRI, e-Pro
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