I had a client ask me the other day, what is DOM? And just as he asked me, he figured it out…. DOM is an acronym for Days on the Market, which is a very important indicator in the world of residential real estate. It stands to reason that the more the DOM add up, it has an effect – and more times than not, a negative one – on the sale and price of the property on the market. Just for reference, the average market time (also known as days on the market) for the 106 active single-family homes on the market in Weston right now, at this very minute, is 160 days (technically it’s 159.64 days) or more than 5 months. And for the 162 active single-family homes on the market in Wellesley this very minute, the average market time is 138 days (technically it’s 138.10 days) or more than 4 1/2 months. But these homes have still not sold. Which then begs the question – what about the solds?
So I decided to share with you some year-to-date sold data on Weston, Wellesley and a few of the other surrounding towns:
- Weston – for the 27 properties that have sold, the average DOM is 171 days and the median price is $1,075,000.
- Wellesley – for the 75 properties that have sold, the average DOM is 188 days and the median price is $925,000.
- Wayland – for the 28 properties that have sold, the average DOM is 191 days and the median price is $454,900.
- Needham – for the 68 properties that have sold, the average DOM is 104 days and the median price is $649,700.
- Lincoln – for the 11 properties that have sold, the average DOM is 209 days and the median price is $1,079,000.
- Dover – for the 9 properties that have sold, the average DOM is 214 days and the median price is $1,025,000.
Pretty interesting information although you can’t necessarily draw a conclusion about the effect of the number of properties sold or the median price of the town/market on the days on the market. When you look at Dover and Lincoln, which have the lowest amount of properties sold and the highest days on the market respectively, and then you look at the Weston market, which has the next lowest amount of properties sold, that trend does not continue as the days on the market is 171 days, which is the second lowest number. And then you look at Needham, which has the lowest number of days on the market, but its median price is higher than that of Wayland, which also has the third highest number of days on the market.
Keep in mind that this data reflects an overall perspective. When you start to look at various price points within a town/market, you see large fluctuations in the DOM depending on the “bread and butter” buyer and price point in that particular market. And honestly, to accurately analyze and summarize the trends of DOM at various price points within specific towns/markets, I think another blog post is in order – so stay tuned for that in the future. The bottom line is that DOM is an analytical tool, which should be taken into account, and yet from a general market perspective, it doesn’t necessarily correlate to size or median price of the market. But interestingly, it can adversely affect the price of the home the higher it is.
Phew…. Anyway, it’s important to know that there can often be more to DOM than just its face value, so sometimes you need to look more closely. For example, the days on the market will reset to zero if a slightly different property address is used (i.e., if a road with a two-word name such as “Knob Hill Road” becomes a single word name – “Knobhill Road”). In addition, if a property is canceled or expires and sits off the market for 90 days, the DOM resets on the 91st day. Often you will see sellers take their homes off the market for the slower holiday months and into the New Year, and then put them back on the market for the Spring months, which makes a lot of sense and has an added benefit of resetting the DOM to zero. So just keep this in the back of your mind, though your savvy real estate agent will be on the lookout for this too.
And one last thing for sellers to think about…. When you are selling home, and you accept an offer on it, the property can be red flagged designating an Accepted Offer or it can go Under Agreement (UAG) in MLS. If you choose to red flag your property, the DOM will continue to accrue, and buyers can still see your property (though this is highly unlikely as buyers prefer to see homes that are “available”). Most times the red-flagged designation will remain this way through the home inspection process and until the purchase and sale agreement is signed – usually an additional 14 days. Alternatively, if you choose to have your property go UAG, it no longer accrues DOM but buyers no longer see the property as an active listing. So depending on which designation you prefer, it has a different effect on the DOM and whether your property is “active” or not. Finally, if the offer falls apart, and you have red flagged your property, the red flag just disappears. Whereas if your property is UAG, it will come appear as BOM (back on the market), which is much more of a signal to potential buyers and other agents about the change of your property’s status.
I think that’s just about everything on DOM, and I’m guessing you never knew there was so much information about and subtleties to this subject? Do you have any stories about hidden DOM and/or how the DOM influenced the sale or purchase of your home? I can’t wait to hear….