Days on Market (DOM) indicates the average time it takes a property to sell in a given area. If your property is listed on MLS, the “days on market” figure appears on the bottom right hand side of the listing once the property is sold and indicates how long your property took to sell. As realtors, we can pull up MLX, which is our back-end version of MLS, and see how long it took to sell a given house by looking at actual days on market. That gives us valuable information about whether a property was under-valued or over-priced when we are doing a comparable analysis for either a buyer looking to make an offer on a property or a seller thinking of selling.
For example, a property that sells in one or two days was probably under-priced relative to the market. A property that takes months to sell was probably overpriced.
When I first started as a realtor, it took 27 average DOM to sell a property. We’re up to 45 DOM now, which means a slower market.
But even those numbers can be pretty skewed. In the past, DOM data on MLX did not include the number of days that a property that was taken off the market and re-listed was on the market in the first place. Every time a property was re-listed, the reset button was hit.
All of that is about to change. Changes to the MLX system will soon be cumulative and that means we’re probably going to see a giant hike in the average DOM for Ottawa. Dave Fletcher, a realtor with Keller Williams , told me last week that he’d looked at re-lists when doing a comparative market analysis for a client and discovered that for the area he was looking at, rather than 45 DOM, the average DOM was 105. That means that on average, instead of a month and a half to sell a property, it was closer to three and a half months!
That’s a huge change from what the monthly statistics suggest for DOM and it means that sellers will need to adjust their expectations: it may take a whole lot longer to sell their properties than they’d expected.
Which is why pricing is so important.
But MLX is going to be changing how DOM is recorded. (My recollection is that the new changes take effect in September, but I could be mistaken. If I am, I’m sure someone will correct me! )
After the changes are made, days on market will be cumulative, so that it won’t matter whether your listing expires or is cancelled and is then renewed: the days the property was on the market from the very first day will be counted as part of the DOM. The only exception is if the property is off the market for 45 days or more. I think we’re going to see the average days on market soar as the new changes sink in.
What does it all mean? Well, in practical terms, not much. Houses will be selling pretty much the way they were before. The only difference now is that we will have more accurate information to work with. For buyers, it means a better sense of how quickly properties are selling where previously those numbers were a little skewed because of re-lists. For sellers in those areas, it will mean having to set more realistic expectations.
And for realtors, it means some frank discussions with those sellers about how the selling process may take longer than expected.