What is the average days on market? How does that change from listing date to sale date. How many homes sell for original list price.?

Asked by Sonia, Lafayette, CA Fri Aug 5, 2011

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The Medford…, Agent, Fremont, CA
Mon Aug 8, 2011
Sonia:

To be honest, these stats do not have as much value as many assume:

Q: What is the average days on market?
A: This TOTALLY depends on the house, condition, price, marketing, current market conditions … AND your Realtor. Homes that are prepared well, priced competitively AND marketed well have a habit of disappearing off the market very quickly, regardless of current market conditions. The better a home is prepared AND the better it is priced, the better a “deal” it appears to be thus more attractive to buyers. In fact, these homes can quickly garner multiple offers and be off the market in a few days.

Sellers always ask me what my DOM ratio is – it’s really a worthless number. I tell my sellers, “Quite frankly, that depends on YOU.” As an example, if I have a non-FHA approved condo in poor condition and a seller who is unwilling to price it correctly … it could be there a long time no matter how aggressively I market it. Using the DOM as an evaluation of my abilities as an agent would be worthless in this case. On the other hand, if I work with an extremely motivated seller who understands the basics, lets me prep the property to the max and prices below the market – I look like a genius with an extremely low DOM number. Again … in light of the overall market – a meaningless number.

IF, however, your home has been sitting on the market a long time, DOM can be used to identify that the property has some issues, could be priced too high … etc. In that case, DOM actually has value – not for the market as whole, but for that particular property.

Q: How does that change from listing date to sale date.
A: DOM is usually measured from list date to pending date.

Q: How many homes sell for original list price?
A: Again, this is a rather worthless number – some listing agents are willing to set list prices too high simply to get the listing. If that particular agent has a number of homes on the market that are overpriced, the list-to-sale price ration is worthless because many homes were valued too high to begin with. In addition, since this is an average number, it does not reflect property condition from home to home, nor is it a reflection of how the home may have been improved, staged, marketed, etc.

If the area has a number of high-end homes that are priced “optimistically” and not selling, yet the bottom of the market is red hot with well-priced homes, then the list-to-sale price ratio could be off by many hundred thousand dollars. As an example, average list price could be $1,150,000 but average sale price could be $780,000 … a huge and meaningless differential. It does not mean a home going on the market at $1,150,000 will sell for $780,000 … it simply means that the lower priced homes are selling and the higher priced homes … are not.

As an extreme example, if you look at the average list price of Clayton, it is $934,000. Average sales price is … $464,000. ???? Unless you know that there is a home on the market for $6,000,000 and 8 homes priced over $1,000,000 (out of 47 homes) – one with DOM of 644 days, one at 530 days and others at 345, 207, 160 … the numbers can be absolutely meaningless.

I’d recommend you meet with a couple of agents and discuss the local area numbers with them – make sure they explain them to you CORRECTLY – you can use stats to prove almost anything and, in many cases, be dead wrong.
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0 votes
Lisa and Greg…, Agent, Danville, CA
Fri Aug 5, 2011
The days on the market really depends on where you live. I work right here in Lafayette and our market is very active!! The very high end will be slower, but any home in the $1,100,000 or less we have seen multiple offers and prices quickly above the asking price. I am helping a family looking for a home here in Lafayette right now. We have written 2 offers and have not been able to get one accepted yet. Is it possible your home will come on the market soon, or be available to see soon?
my name is Lisa Doyle cell number (925)890-7443 http://www.thedoyleteam.com
0 votes
Suzanne Look…, Agent, Lafayette, CA
Fri Aug 5, 2011
Sonia,

You have received excellent information provided by the realtors below. Every situation is unique as every home is unique and the decision a buyer makes to purchase your home is very individual. That is why it's vital to expose your listing to the maximum number of people you can. With the new jumbo loan limits changing for the worse for buyers in our area, it is even more important that you use precise strategy for the sale of purchase of a home.

Interview a couple realtors and choose one that best fits your personality style and that has references for your area and that you instinctively trust. We are consultants and advisors and it's very important that you get the best advise and guidance for your unique situation.

Good luck to you!

Suzanne Looker
Web Reference:  http://www.suzannelooker.com
0 votes
Lance King, Agent, San Francisco, CA
Fri Aug 5, 2011
Sonia,

Averages area good place to start, but you need to dive deeper to see what's really going as both days on market (DOM) and listing prices are all over the place. As Ron pointed out many sellers think they need to start high to give room to negotiate, but they almost always end up selling for less than they would have if priced right out of the gate. There are also sellers who price their home based on their equity position (how much they owe) with no regard to market metrics, and this is an equally bad strategy.

Because of the foregoing, DOM is affected to a higher number. What this all means is that the averages aren't going to indicate how quickly and at what percentage of the asking price your home will sell for. A knowledgeable, experienced agent/broker can do in-depth research to see how your home stacks up against the ones that are selling (and ones that aren't) and give you an intelligent strategy for pricing and preparing your home for sale.

As a last word of caution, don't hire your agent/broker because your mom used them. Hire them because they are the best you can get. I can't tell you how many listings we see (STILL) with awful or no photos, and staging your home, even if using your things also makes a huge difference. We are always available for no-strings consultations for property owners.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
0 votes
Ron Thomas, Agent, Fresno, CA
Fri Aug 5, 2011
Suzanna and Steve addressed the DOM, I will talk about the Listing Price:

LISTING PRICE

Understand that the LISTING PRICE has one primary objective, to attract attention: It is not intended to be set in stone, and in many cases it is not even a good guideline toward the SELLING PRICE.

Some Sellers believe that by setting the LISTING PRICE high, they can always come down, and people will make an offer anyway: WRONG! Buyers will just bypass the property and look at houses that are within their price range. And six months from now, the Seller will slowly start lowering the PRICE, (this is called “chasing the curve”) and Buyers will be asking the question; “What’s wrong with that house?” and “Why has it been on the Market so long?”

Other Sellers set the LISTING PRICE low, to attract multiple offers. (The correct strategy.) We are asked; “Aren’t you obligated to sell at this price if someone offers it?” The answer is probably not; for that to happen, you would first have to have only one offer, and secondly, the offer would have be exactly the same, down to the smallest detail, (please discuss this with your Realtor).
Another thought; Buyer will search for potential properties by groups; for example, $400,000 to $450,000, and $250,000 to $300,000. If your house is priced at $460,000 or $310,000, the Buyers will never see it. (something else to discuss with your Agent.)

We have found that extremely often, the LISTING PRICE that is set on SHORTSALES and REO’s are not determined, nor even discussed with the Bank: The banks play their cards very close to the vest, they will not tell the Listing Agents any more than they have to; they will not give us their lower limits. So usually, the LISTING PRICE on a distressed property is a number taken out of the air.

If you are considering a property, have a Realtor do a CMA, (Comparative Market Analysis) to help you determine your Offering Price. If you look at enough CMA’s, you will see the trends.
0 votes
Bob Wegener, Agent, Moraga, CA
Fri Aug 5, 2011
Hi Sonia,

The average days on market for all homes sold in Lafayette from Jan. 1 this year is 51 for single family, 43 for condo and 42 for townhomes. Most homes will have about a 30 - 45 day escrow period after the pending date. The average percentage of actual purchase price to asking price in the same period is 84% for single family, 95% for condos, and 93% for townhomes.

You can get the answers to your questions in a custom report specific to your neighborhood by visiting http://www.94563orindaestates.com

You can also check http://www.orindahomesearch.com and click the market insider tab to view the latest market statistics.

I hope this answers all of your questions.
Web Reference:  http://www.bobwegener.com
0 votes
Steve Dawson, , Walnut Creek, CA
Fri Aug 5, 2011
Sonia,

The average days on market for properties that have sold in the last 6 months is 43 days for detached homes. The average days on market for current active properties is 94. 33 of the 46 homes that have sold in last 6 months have sold at list price or for more than list price. Lafayette is doing really well for sellers right now. It is in high demand for buyers, and much of the time, the homes have multiple offers.
Web Reference:  http://www.brokerdawson.com
0 votes
Suzanne Look…, Agent, Lafayette, CA
Fri Aug 5, 2011
Hi Sonia,

There are lots of statistics that make up days on market (DOM). There is the cumulative days on market from the onset of the listing to the present and days on market since the most recent price adjustment.

The percentage of homes that sell for original list price varies from area to area. If you are interested in statistics and other vital information to determine what your home is worth or for purchasing a home, I highly suggest you contact a realtor. We have access to answers for these types of questions specific to your situation.

Regards,
Suzanne Looker
Web Reference:  http://www.suzannelooker.com
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