Even in the age of the novel coronavirus, the process of browsing online listings hasn’t completely changed. Sure, there’s much more of an emphasis on new features like virtual tours, but a listing page is still likely to show all the specs you’re used to seeing—things like price per square foot, year built, and, of course, days on market.
For buyers, a property’s days on market, or DOM, is an important figure. Before the pandemic, a house on the market for more than 30 days was considered stale. But in these historic, uncharted waters we’re currently navigating, does DOM carry the same significance it once did?
“Historically, days on market has been one of several indicators of the value of a property,” says Dave Wetzel, MLSListings president and chief executive officer. “But COVID-19 is a particularly unusual circumstance, and such a drastic and sudden change in the housing market makes it much harder to determine the level of importance of DOM.”
Technically, we’re in prime buying and selling season, but currently, social distancing and masks are the new norm, open houses are rare, and buyers are hesitant to buy. Therefore, the rules on how much weight DOM carries have changed a bit. Here’s what real estate experts have to say about the current conditions.
Days on market 101
First, let’s go over the basics. DOM is the number of days a property is listed for sale on the multiple listing service until the date when the seller has sold the property.
The DOM can vary dramatically with market conditions and by price point. (For example, some luxury properties can sit on the market for longer because the pool of viable buyers is smaller.) But, in general, a high DOM has been thought to indicate that buyers are reacting poorly to the house.
Comps have always played a big role in gauging how much weight to give a home’s DOM.
“Usually, an important indicator is how a property’s days on market ranks against the average in that neighborhood,” says Wetzel.
Should days on market matter during COVID-19?
Under normal circumstances, buyers will use DOM as a tool to determine if a house has been given an appropriate asking price.
“If a listing is priced well, offers will come in, and hopefully a deal can be struck,” says Steve Gottlieb, real estate agent for Warburg Realty in New York City. If it’s overpriced, the property will sit, and the DOM count will tick up.
However, the COVID-19 pandemic forced many people to seriously reconsider buying, selling, and moving. Because of that, DOM may no longer signify as much as it did a few short months ago.
“It becomes tricky during COVID-19 to try to identify a number [of days on market] as good or bad, because the global health crisis requires everything to have an extra layer of examination,” says Wetzel.
Because the pandemic has radically changed the speed and ability of many properties to sell, Gottlieb says a climbing number of DOM can be “misleading and, therefore, not useful.”
Wetzel says in these unprecedented times the usual rules don’t apply, and there isn’t a DOM playbook for what it should be during a pandemic where houses can’t be shown.
Of course, DOM has never been the sole indicator of a property’s value. In a strong market, 45 DOM might be high, but in a slow market, 45 days might be low. Therefore, in these extraordinary times, it’s wise to rely on other key indicators like the property’s location, curb appeal, neighborhood comps, home improvement potential, and local market conditions.