As a real estate consumer, do you pay attention to the days on market? In some cases, it can be difficult to tell how long a home has been offered for sale because there are a myriad of marketing channels now, especially online. It’s almost a twist on the old concept of shadow inventory. The days on market deception is pronounced in some cases, though happily, it seems to be far from all of them.
Why is the days on market data murky sometimes?
The MLS in our area, MLS Listings, shows both a list date (when the home was entered onto the MLS for public viewing) and a “Days On Market” (or DOM). In the best of all possible scenarios, those line up seamlessly and reflect the total marketing period. In some MLS organizations, they also show a Continuous Days On Market or CDOM, representing the total days, including any breaks in time or switches between agents / brokers in listing the property.
Days on market deception in practice
Here’s where there can be confusion on the actual days of market exposure:
- being listed, for up to 30 days, on the “coming soon” section of our MLS (won’t be displayed on the regular MLS for the public or real estate agents)
- being held open for a week or two before getting exposure on the multiple listing (not tracked on the MLS)
- other marketing offline, such as “coming soon” signs, advertisements, or mailers (not tracked by the MLS)
- being listed in a non-mls private listings club (data not shared with the MLS)
- getting promoted on Redfin or other sites as a coming soon – even the disclosure platform, Disclosures.io, now solicits for these pre-market listings on their site (information feed is one way: the MLS can tell Redfin about the listing, but Redfin doesn’t tell the MLS about coming soons)
- going on and off the MLS with a 30 day break or more will halt the timer for days on market (even if the list date remains the same)
- pocket listings or whisper listings that sell without ever going on the MLS at all (but still had a marketing period, possibly with the sale reported on the MLS for comp purposes only)
- homes listed, then canceled, then relisted with another broker after a month off the mls will show as a “new” listing and DOM will be zero (in some places with a different MLS, the CDOM would list all of the days – better data)
All of these factors can really obscure the data and make it difficult for consumers (and sometimes buyer’s agents) to know how long a home has actually been receiving market exposure. And we don’t know the exact number of listings impacted because it’s not being tracked.
Why do the days on market matter?
As a buyer or seller, it would be useful to know how long the house at XYZ Main Street actually took to sell. Was it three months of word-of-mouth promotion? Was it a year? Or was it the opposite: the home wasn’t for sale at all, but someone knocked on the door and asked to buy it (don’t laugh, it happens). We don’t have a way of tracking these things accurately outside of the MLS, and even the MLS isn’t as accurate as many of us would like.
Better data is good for everyone: it is better for home buyers trying to choose how much to offer, better for sellers trying to decide how to price their home or what price to accept for their home. It enables Realtors, lenders, and appraisers to do a more professional job as well.
Wouldn’t it be helpful if we had a basic standard that included transparency in the actual days in which residential real estate was being marketed? For off market sales reported on the MLS, usually the days on market display as zero. What if we had another way of tallying that activity? As information control is lost by the MLS to other portals, this becomes especially critical.
Pre-marketing and off market sales may resemble more of a scatter chart than a line or bar in a graph. For the MLS organizations to stay on top of the data, they’ll have to find a way to track these things. It’s not impossible for the online portion. Sites like CopyScape.com can find duplicate content, so how hard can it be to get listing information promulgated on Disclosures.io, Redfin, Zillow, or other sites which advertise coming soons? Many of these sites want MLS feeds of listings. Couldn’t reporting the status of coming soon or off market listings be part of a reciprocal agreement?
Luckily, in most cases, the days on market deception is minimum. Most homes go directly on the open MLS without pre-MLS open houses or listings on various websites or the MLS. For the portion of homes sold without this transparency, I think we can do better. Consumers, their agents, their appraisers, and their lenders all require accurate data.
Interested in the days on market for your area? I have market stats, including the DOM, for San Mateo County, Santa Clara County, and Santa Cruz County on my Silicon Valley Real Estate Report site. Check it out!