There’s this really interesting number related to listings of homes for sale in the MLS, Multiple Listing Service. It’s the DOM, or Days on Market number. Just to be clear, it can be two numbers, and it is in many MLS reports.
Current DOM – The home is listed, and this is the number of days it’s been on the market during this listing. It may not reflect the total number of days the home has been for sale, as some MLSs allow the listing to be removed and replaced later and start over with the DOM count. The time it must be off the market varies, but it’s a factor that could cause Current DOM to not reflect actual time the home has been for sale.
Cumulative or Aggregate DOM – This is a number that some MLSs report that pulls the previous time on market in. If it didn’t sell, but was pulled from the market for a period of time and put back up, then this would have the total of the days on market for both listing periods.
The thing about DOM is that every buyer wants to know what it is, and every seller worries about it becoming too long for their home. Problems arise when a home is listed at a price too high for current market conditions. This can happen for a number of reasons. The seller may not be listening to their agent, and demand a listing price higher than what’s been recommended. Or, the agent may not be watching the market closely enough and fails to recommend a price adjustment, resulting in the home being priced too high.
Whatever the reason(s), homes can end up languishing on the market far too long, throwing off the average DOM numbers for the entire MLS. This doesn’t mean that there is no value in the DOM numbers. However, take them in context with other market conditions. They can be used to compare brokerages, in that some will have their listings selling faster on average than others. Or, they can help you to set your listing price based on a study of previously sold homes. Looking at the homes that sold quickly, you can see how their prices compared to similar homes that stayed on the market longer.