Average Days On the Market (DOM) is an important metric because statistically a home should go under contract in an optimal number of days and correlate to the price point and neighborhood. The marketing and negotiation strategy should be tailored to this key metric. And, DOM can also give an indication how robust the market is.
City of BOULDER all homes JAN to JAN comparison:
0% of all home Buyers have some sort of financing which affects the average number of Days on the Market. This is because it takes an average of 30 days for most loans to close after a property has been placed under contract. Therefore; if the average DOM was 30, one would interpret that homes were under contract, within only a day or two of being listed.
The graph above for Boulder Colorado shows that most homes are on the market in January for 47 days before going under contract (total DOM 77). The DOM trend is moving toward a more equalized market with supply and demand coming into balance.
The number of DOM decreased slightly in 2018 and increased significantly in January 2019.
The months with the greatest DOM for 2017 and 2018 is January, which is the slowest month of the year. Over the next several months until June we will see fewer days on the market, because demand is catching up with inventory. This is a good time to be a seller and can be hit or miss for Buyers. The late summer and fall usually see an increasing total number of days on the market peaking in January.
The Graph above shows the number of DOM for Boulder since 2010. One thing to note is that even though the total number of DOM has increased in January 2019 over the January 2018 and January 2017, the DOM as in indicator still shows a robust housing market when taken into the context of the last eight to 9 years.
The DOM on the market indicator for Denver is substantially lower than in the Boulder market. This is the result of several factors, but the main factor is the way that DOM is calculated in the Denver compared to Boulder. In Denver the predominate Multiple Listing Service (where homes are placed for sale) is different than in Boulder. Using this system, most Denver based agents will change the status of a home that has gone under contract from “Active” to “Pending”.
The Pending status will essentially ignore the period during which the loan is processed, so in this case there is no need to subtract the 30-day loan processing/waiting period. Another significant factor is that Denver properties on average experience fewer DOM than in Boulder because the price point tends to be more affordable than in Boulder.
One can see that the Denver market has also had a slight increase in the number of DOM, but that in general, properties are still being placed under contract within 8 days of hitting the market.
Taking that into a historic perspective of the last 10 years, we see that the Denver Housing Market is still very robust.
When properties sell very quickly, its important to have a strong lender who can give your offer an edge with the ability to close quickly.
One strategy is to get pre-underwritten which means the lender evaluates all your income and qualifications as if you were under contract to purchase a home, the only thing left for you to do is find the house and get it under contract. After this is complete, the only outstanding item is the appraisal and the loan will be nearly ready to close. If the home is priced correctly, this makes your offer competitive with a cash offer. Another tip is to have a Realtor who is responsive and dedicated enough to you to act immediately when a home that fits your criteria hits the market.