DOM stands for “Days on Market”.
DOM refers to the number of days a property has been listed for sale before it goes under contract or is sold. A shorter DOM can indicate a strong demand for the property, while a longer “Days on Market” stat might suggest a property is not as attractive to buyers or may be priced too high.
It is an important metric for buyers, sellers and appraisers to assess market trends and property value.
Calculating DOM
Calculating DOM is straightforward. It starts from the date the property is listed for sale until the seller accepts an offer and the property is marked pending. If a property is relisted after being taken off the market, its DOM resets. However, each listing has a CDOM that counts all days the property has been listed.
Interpreting DOM Data
Interpreting DOM data requires context. Market conditions can vary significantly from one location to another and within individual neighborhoods. It’s important for real estate agents to first understand what the average Days on Market are, then uses that threshold to compare a subject property.
For example, if a buyer’s agent is being asked by their client how quickly they need to make an offer on a home they are interested in, the buyer’s agent should pull the data for all homes sold of the same size, age, style and condition for the last 3-6 months within 1 mile of the subject property. If the days on market are less than the average for the region, the home is in higher demand. If the DOM is a higher number than the average, it is not as desirable in that area.
Impact on Pricing Strategies
Understanding DOM is particularly crucial for pricing strategies. Real estate agents can use DOM as a benchmark when deciding how to price a home for a seller. If comparable properties are selling quickly, it may be wise to price a home competitively to attract buyers. On the other hand, if a property has been on the market longer than average, sellers may reconsider their pricing or make improvements to enhance appeal.
For buyers, knowing the DOM of a property can help define their negotiation strategies. If a home has been on the market for a lengthy period of time, buyers might leverage this information to negotiate a lower price, presuming the seller may be more willing to entertain offers.
