Why "Days on Market" can be Misleading

Be careful if you're reviewing a market analysis that shows the Days on Market for recent sales in your area. Why? Because the Days on Market numbers that come from the MLS apply to listings, not properties.

The problem with this is that many properties in the current market will be relisted - sometimes several times - before the final listing sells the home. Take a look at the MLS statistics for the 3 condos below. The first condo shows a Days on Market of 5 days, the second unit shows a Days on Market of 79 days, and the third unit shows a Days on Market of 50 days.

What you can't tell by looking at the MLS summary above is that property three (3416 Valley Ridge) went through two expired listings before the third listing sold the property. When you add up the Days on Market numbers for all three listings, the total is 316 days, not 50.

If you want to know the true picture for how long it took to successfully market a particular home, you need to know the history of any listings that expired before the final listing sold the property.

This is why we track both the number of sold and the number of expired listings for Dane County homes and Dane County condos, as well as Dane County listing success rates, in our coverage of the local real estate market. You'll find these statistics on the Real Estate Trends page at DaneCountyMarket.com.

We also track the Days on Market trends for both sold and expired listings. Our research shows that when listings sell, they tend to take longer to sell than listings from previous years. The Days on Market for expired listings has also increased from the levels of prior years. We'll cover this topic in more detail in our next post.