Days on the Market
Why is this important?
Days on the market is a measure of the number of days a property listing is active before an offer is accepted. Days on the market is one of the most common indicators of a local real estate market’s performance, and a low number of median days on the market indicates a robust, competitive housing market that favors the seller and where demand is high and supply may be low. For sellers, a low number of median days on the market is indicative of potential wealth creation from profit from the sale of a property. Conversely, low median days on the market is an indicator that homeownership is becoming less available to first-time or lower-income homebuyers who are faced with steep competition and low inventory [i].
Median days on the market can also be measured for specific types of housing, indicating if certain housing types, like single family or townhouses, are quicker to sell than others. While days on the market for individual housing types does not indicate the distribution of housing types, it may indicate if demand is greater for certain housing products where supply may be low [ii].
[i] Olick, Diana. “Homes this Spring are Selling Faster than Ever.” CNBC. 13 June 2017. Web. 28 June 2017. <http://www.cnbc.com/2017/04/13/2017-shaping-up-to-be-fastest-housing-market-on-record.html>.
[ii] Harney, Ken. “Two Key Real Estate Indicators Demonstrate Housing Performance.” Forbes. 19 Sept 2012. Web. 28 June 2017. <https://www.forbes.com/sites/realtorcom/2012/09/19/two-key-real-estate-indicators-demonstrate-housing-per/#4510cbfe30ff>.