What Does “Days on Market” Mean and Why Is It Important?

What Does “Days on Market” Mean?

The term days on market is fairly simple. According to Bank Rate, days on market refers to the number of days a home has been on the real estate market. In other words, the number of days on market is the number of days between the listing date and the sale date.

On a listing, you might see days on market abbreviated as DOM. According to Open Door, buyers and their realtors can use the DOM number as crucial information to see which houses are new and which might be stale or not selling for one reason or another.

If it is a very competitive market known as a “seller’s market” in which there is little inventory but many buyers, you will see very low days on market numbers for the majority of homes. In markets like this, if a house has a high DOM, it may be priced incorrectly or uninhabitable for one reason or another.

Why Does “Days on Market” Matter?

Days on market is crucial for a couple of reasons. The average DOM in the area in which you are looking to purchase can let you know what kind of market you are in. If most houses have a low average DOM, it is probably a seller’s market. If the reverse is true, you may be in a buyer's market.

Secondly, days on market can let you know if you have an advantage as a buyer in a seller’s market. If most homes sell within a couple of weeks but a property has been on the market for months with little luck, you may be able to get the home for under the asking price even in a seller’s market.

However, a high days on marker number in a seller’s market can also indicate problems with the property. Make sure that you do your due diligence before committing to any property, but especially one with a high DOM number.

Conclusion

Days on market refers to the number of days between a house’s list date and the date in which the buyer and seller enter a contract. Days on market is very important. If you are in a seller’s market and find a house with a high DOM, it may indicate problems with the property, but could also be an opportunity to purchase the home under the list price.