Welcome to “The REAL Days On Market.” Why are we writing this? To solve a glaring problem.
Will the real days on market please stand up, please stand up, please stand up
The Problem: We Realtors and appraisers count on information in the multiple listing service (MLS). We analyze all types of trends, such as sales prices, medians, averages, yada yada. However, there is one metric that is particularly tough to count on in the current system. That metric is Days on Market. What is Days on Market? Quite simply, it is the amount of time it takes from the date a property first hits the market to the time it sells.
Scenario 1: If 555 Main Street hits the market on January 1st, goes into contract on January 10th, goes into pending status January 20th, and closes on January 30th, here’s what MLS will tell you:
Days on Market for 555 Main Street: 20 days (yes, they are using the day it went into “pending” status)
My Gripe: This does not show how hot the property actually was. I think the day you have a ratified contract on the home is a better measure of how the market received it. I’d put this number at 10 days on market.
Scenario 2: Let’s say that 555 Main Street had been on the market for 90 days prior to the January 1st listing date, with another brokerage trying to sell the home. They were unable to sell it and the listing expired. It was then listed on January 1st, went into contract on January 10th, went into pending status January 20th, and closed on January 30th. What will MLS tell you?
Days on Market for 555 Main Street: 20 days
My Gripe: They left out the previous days of marketing time! Is this in some way insignificant? Not in my opinion. It should read 110 days, using their “pending” status date, or 100 days using my ‘moment it goes into contract’ status date. This does not show how cold the property was.
Either way, the whole picture is not being told. So we have a SOLUTION: Read the rest of this entry ?