Average Days on Market

I have been using Terradatum Market Metrics - it is a fantastic resource for those of us that think the providing of Market Data is the way to provide superior service to all consumers and clients.

If this service were not included as a part of my membership - I would gladly pay for it.

This is an example of the Santa Clarita Data posted on our Santa Clarita Real Estate Blog.

Average Days on Market by Month (AVG DOM)

This chart shows the average amount of time, in days, that it has taken to get a property under contract during any given month. DOM, for any individual property, is defined as the list to the under contract date (either contingent or pending depending on your MLS). The DOM"s of all under contract properties for the month are then added together and divided by the number of properties to get the Ave DOM figure. From a sales rate perspective this metric is an "inverse" indicator, i.e. when the ave DOM is decreasing the sales velocity is increasing and Vice Versa.

The chart subtitle clearly states the percentage change between the first month's value and the last month's value (notice they are the same month but in different years). This "same" month comparison over different years is a popular real estate "yardstick" because there is no "seasonality" involved in the measurement. Thus, any changes that have taken place are primarily due to the market "forces", i.e. the collective behavior of all consumers participating in the market.

Invoking the "linear" trend line helps you recognize whether the rate of sales activity is changing over time or not; and to what approximate degree. An upward sloping rend line indicates an increase in Avg DOM (sales velocity decreasing); a downward sloping trend line indicates a decrease in Avg DOM (sales velocity increasing); and a flat trend line indicates that there has been very little change in the Avg DOM (sales velocity is stable).