What Is DOM (Days on Market) in Real Estate?

Days on Market (DOM) is a fundamental metric in real estate, representing the duration a property has been actively listed for sale. It serves as a key indicator for understanding the liquidity and demand surrounding a specific property and the broader market. This metric provides valuable insights into how long homes typically remain available before attracting a buyer.

Defining Days on Market

Days on Market, often abbreviated as DOM, tracks the total period a property remains actively advertised for sale on a Multiple Listing Service (MLS). This metric begins counting from the date a property is first made available to the public and real estate professionals through an active MLS listing. The primary purpose of DOM is to measure how long a specific property has been exposed to the market without securing a buyer. The count generally concludes when the property transitions to an “under contract” status, meaning a buyer and seller have agreed to terms, or when the sale is officially closed.

Calculating Days on Market

The calculation of Days on Market begins precisely on the date a property’s status changes to “Active” within the Multiple Listing Service. This active status signifies the property is available for showings and offers. The count typically ceases when the property moves into a “Pending” or “Sold” status, indicating a successful agreement or completed transaction.

Different listing statuses can influence the DOM count. If a property is temporarily taken off the market, its “Active DOM” (the continuous current count) might pause, but its “Cumulative DOM” (CDOM) continues to accrue. CDOM represents the total time a property has been listed across all periods, even if it was delisted and relisted, providing a comprehensive history of its market exposure.

Significance of Days on Market

Days on Market serves as an important indicator of market conditions and property appeal. A consistently high average DOM in a particular area often suggests a buyer’s market, characterized by ample inventory and slower sales activity. Conversely, a low average DOM can indicate a seller’s market, where demand is strong and properties sell quickly due to limited supply.

For an individual property, a high DOM might suggest issues such as overpricing, lack of buyer interest, or specific property flaws. It could also reflect a slower overall market. In contrast, a low DOM typically points to competitive pricing, high desirability, or a strong market, indicating the property quickly resonated with potential buyers.

How DOM Informs Real Estate Decisions

Days on Market provides actionable insights for both buyers and sellers navigating the real estate landscape. For prospective buyers, a higher DOM can signal an opportunity for more flexible negotiation on price or terms, as sellers may be more motivated to accept offers. It also helps buyers gauge the level of competition for a particular home.

Sellers can utilize DOM as a feedback mechanism for their listing strategy. If a property’s DOM begins to climb without generating sufficient interest, it often indicates a need for adjustments, such as re-evaluating the asking price, enhancing marketing efforts, or making property improvements. While DOM is a valuable data point, it is best considered alongside other factors like comparable sales, property condition, and local economic trends to form a comprehensive market analysis.