When buying a home it’s important to know what commonly used real estate terms mean, and more importantly, what they mean for you as a buyer. One of the key factors home buyers look at aside from price and location is the number of days a property has been on the market.
Days on market start when the property is listed and end when an offer is received and the status is changed from ‘active’ to ‘pending’. The total days on market are calculated by taking the last 30 days to six months of sold listings, adding together the days on market (before each listing went pending) and dividing that total by the number of listings.
A low number of days on market could mean that the property was only just listed or re-listed, that there is a smaller inventory of properties for sale in that area, or that the property is located in a high demand area where buyers are motivated to move quickly. Over the last three years in Colorado, the median number of days on the market has remained consistently around 65. This is typical of other high demand areas as well; San Francisco and Chicago have also seen properties sitting on the market for roughly 65 days prior to sale, whereas lower demand areas like Ohio and Kansas had homes on the market anywhere from 60-360 days or more.
A high number of days on the market can correlate to a handful of things, but the usual reason a property will remain on the market for an extended period of time is over-pricing. Over-pricing is incredibly common in the real estate world where it’s understandably hard for a seller to put a material value on their home, something which to them, can be considered priceless.
If a property is priced correctly and still on the market after a long period of time you may want to ask yourself if something could be wrong with it. If this is the case, it’s important to find out as soon as possible before you lock yourself into a contract.
Finally, it’s also possible that there is an entirely innocent reason the property is still on the market. Maybe the owner just isn’t that motivated to sell, or there is a tenant living there currently which makes scheduling showings difficult. Whatever the reason, if the home you’re interested in has been on the market for longer than the average amount of time in your area, it’s important to do the full research to find out why- who knows, you may even be able to negotiate a lower price!