By Penelope Graham

Canadian real estate is always the topic du jour: daily media coverage closely tracks every fluctuation in hopes the data will divulge an imminent boom or bust. However, focusing only on the number of sales and average price tells just part of the story.

While it’s important to know how many homes are changing hands, and for how much, there’s another metric that provides valuable insight to the urgency – or lack of – in any given region: the number of days a listing remains on the market (DoM). Here’s why agents should ensure their clients have a firm grasp on this data point when determining their next market move.



An added layer of insight:

Delving into the DoM offers valuable insight to savvy buyers and sellers, helping them time the market, or hone offer strategy. It can shed light on why some neighbourhoods experience bidding wars as the overall market softens, or why one property remains untouched while its neighbours sell like hot cakes.

Like the sales-to-new-listings ratio, determining the aggregate DoM (calculated by adding up the active days for homes for sale, and dividing by the total number of listings) can gauge whether a market is balanced, or in buyers’ or sellers’ territory. This is clearly of huge benefit to sellers determining whether it’s the right time to list their property or measure the level of demand for their listing against local comparables.

Look to DoM for hot or not neighbourhoods:

This is especially helpful in local markets, where selling conditions can vary widely by neighbourhood. For example, check out how DoM differs across the City of Toronto housing market:

Lingering listings create stigma:

Assessing DoM is equally of importance for prospective buyers seeking an edge. Not only can it indicate the level of competition within specific neighbourhoods (typically, the shorter the DoM, the hotter the demand in that area), but it can potentially raise red flags for individual properties.

In particularly hot markets, properties that languish for an extended period of time can garner a stigma; this may suggest an inherent issue with the property, as it has been continuously overlooked. However, a longer DoM could also hint there’s a good deal to be made. The seller may be more open to price negotiations and accepting of financing or inspection conditions.

However, this also directly contributes to instances of multiple re-listings, as sellers would rather yank their listing, readjust pricing strategy and post under a fresh MLS number to seize a new opportunity to get in front of buyers. It’s especially important for agents to explain this phenomenon to their buyer clients, as properties that have been brought to market multiple times could also present a good opportunity.

2 COMMENTS

  1. Not criticizing, but the overall discussion stems from “averaging.” In my opinion averaging can be unreliable and you can twist the information and turn it in any direction to support whatever end result you have in mind. I don’t know why, but averaging anything doesn’t sit well with me. I see it as manipulating stats to try to convince a buyer or a seller to do what the agent prefers them to do. I see it as comparing apples to oranges. And therefore might as well include all property types in one equation to create an overall overview.

    Especially of note in the writer’s paragraph: “Like the sales-to-new-listings ratio, determining the aggregate … ” might be how to teach Grade 7 math to a student (red herring: the blue train, travelling at x speed will take how long to arrive at Union Station?) but applied to real estate?

    I just don’t get how averaging proves anything. And could take advantage of people who don’t understand how the industry works any which way or perhaps haven’t bought or sold in many years and so much has changed just year over year, so they could easily be led down a garden path.

    I always found that agents who used this type of market analytic relied on information in an area too broad to be a true calculation.

    One of the beatifics of farming is the truthfulness of the analytics. People recognize the details, the specifics, the street names, or at least intersections, and sometimes the actual nearby properties, so they know the information truly applies to their market, not a geographic overview of the city as a whole (any city).

    If sellers can understand and relate to tight demarcation lines, they are more apt to consider listing at an appropriate asking price, thus eliminating from the get-go any opportunity to become a lingering listing; there’s nothing wrong with a listing priced as much as ten percent above an ideal price. Beyond that parameter, how to market such a property, and DoM indeed does become questionable. That certainly doesn’t mean being convinced to underprice is the way to get a property sold in a tight DoM timeframe.

    If an agent is using DoM as a prerequisite in establishing likely value, he might find it useful to use charts and graphs showing bell curves year over year. For example this current 90-day period, in this specific geo-market last year compared to this year might speak analytical volumes as to the relationship in regard to decision-making, based on market conditions determining DoM. But the danger is that none of the information might present an accurate or truly supportable market diagnosis. What is failed in the concept to be included is the finite details that always differentiate one property from another. In order to use DoM analytics agents must have a gigantic understanding of the up close and personal area dynamics.

    I only speak of course from my own experience. Everyone works differently and has to do what works best in his marketing area and with/for his client base. I was always interested in building business out into the future.

    I lost count of how many sellers and buyers I told it’s best not to do this right now. Not because I had a magic formula but because their expectations were not in tune with the market in their specific location. They thanked me, I went away empty-handed, no contract; but when the time was right they called me or I called them. And a deal was done like a fast fry dinner. In this business timing is everything.

    One of my chief problems was I often did too good a job. Buyers never had to move again. And some sellers simply stayed put and never moved because their expectations were unrealistic. But I never considered the time I spent with them wasted. They sent their friends and relatives to me

    Carolyne L 🍁

  2. re Last Paragraph – Indeed, the terminate/re-list strategy is SO prevalent that your VERY detailed DoM report would be complemented by a similarly-constructed display of Month-end Active by Units Sold calculation of “Months of Inventory”

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