Even in the age of the novel coronavirus, the process of surfing online listings hasn’t completely changed. Sure, there’s much more of an emphasis on new features such as virtual tours, but a listing page is still likely to show all the specs you’re used to seeing–things such as price per square foot, year constructed, and, of course, days on market.
For buyers, a property’s days on market, or DOM, is an essential figure. Prior to the pandemic, a house on the market for more than 30 days was thought of as stale. But in these historic, uncharted waters we are currently going through, does DOM carry the same significance it once did?
Historically, days on market has been one of several indicators of the value of a property.But COVID-19 is a particularly unusual circumstance, and such a drastic and sudden change in the housing market makes it much harder to determine the level of importance of DOM.
Technically, we are in buying and selling season, but currently, social distancing and masks are the new standard, open houses are rare, and buyers are hesitant to buy. Therefore, the rules on how much weight DOM carries have changed a bit.
Understanding Days on Market
Let’s go over the basics. DOM is the number of days a property is listed for sale on the multiple listing service before the date once the seller has sold the property.
The DOM can vary dramatically with market conditions and by price point. (For example, some luxury properties can sit on the market for more because the pool of viable buyers is smaller.) But, in general, a high DOM has been thought to indicate that buyers are reacting poorly to the house.
Comps have always played a drastic part in gauging how much weight to give a home’s DOM. Typically, an important indicator is the way a property’s days on market ranks against the average in that neighborhood.
Should days on market matter during COVID-19?
Under normal conditions, buyers will use DOM as a tool to determine if a house has been granted an appropriate asking price. If a listing is priced well, offers will come in, and hopefully a deal can be struck.
If it is overpriced, the property will sit, and the DOM count will tick up.
However, the COVID-19 pandemic forced many people to reconsider buying, selling, and moving. Because of that, DOM may no longer signify as much as it did a few short months ago.
It becomes tricky during COVID-19 to attempt and identify a number [of days on market] as good or bad, because the global health crisis requires everything to have an extra layer of examination.
Because the pandemic has radically changed the speed and ability of many properties to market, A climbing amount of DOM can be “misleading and, therefore, not useful.”
During these unusual times, the rules don’t apply, and there isn’t a DOM playbook for what it ought to be during a pandemic where houses can’t be revealed.
Of course, DOM has never been the sole indicator of a property’s value. In a strong market, 45 DOM might be high, but at a slow market, 45 days might be low. Therefore, in these extraordinary times, it’s wise to rely on other key indicators such as the property’s location, curb appeal, neighborhood comps, home improvement potential, and local market conditions.