Next to prices—and how much they jump year to year—days on market (DOM) is among the most closely watched barometers in real estate. Defined as the period of time a property is up for sale before a conditional offer is accepted, days on market essentially measures how fast or slow a home sells.
Across the Greater Toronto Area (GTA), the average days on market is just 15, while in certain hot pockets and neighbourhoods, you can count the number of days it takes for a house to close with your fingers.
The figure is a testament to how hot housing is in Toronto, where sold signs perched up on lawns rarely go without an accompany message boasting how fast the property got snatched up by a buyer.
Why days on market matters
Days on market is a key indicator of whether conditions favour buyers or sellers, and in turn, informs home hunters how they should approach a purchase: If there’s room to negotiate or if they need to jump quick before a home is bought by another bidder.
The lower the days on market, the faster homes sell and the more competitive the housing environment. In such situations, buyers know time is of the essence and they need to act fast.
Here are some quick buyer tips when DOM is low:
- Make sure all your finances are in order as soon as possible. A mortgage pre-qualification isn’t enough—get a mortgage pre-approval right from the start;
- Be prepared to go in for more than the property’s asking price, but remember to avoid drastically veering off your original budget;
- Get notified the moment new properties hit the market by signing up for email listing updates from your agent; and
- When inventory is low and demand is high, home sellers have the real negotiating power. Go the extra mile by offering to cover home inspection costs.
Higher days on market means properties take longer to sell, activity is slow and buyers have the upper hand. The longer a property lingers on MLS, the more buyers may conclude there’s “something wrong” and either try to lowball or skip the home altogether.
Here are a few pieces of advice for sellers who want to avoid high days on market:
- Don’t get emotional about your property and price too high for the market. You and your agent should select the asking price based on what comparable homes in the neighbourhood have recently sold for;
- Declutter your home and remove personal items to ensure you make a good impression in photos and during private tours;
- Work with a full-service agent who will market your property on MLS and across multiple real estate portals; and
- Be flexible and available to accommodate for private showings, even at off times.
Days on market: Toronto statistics
Home sellers usually have two priorities high up on their list: Sell for the most amount of money in the quickest time possible. Official statistics from the Toronto Real Estate Board highlight the degree to which housing in Toronto checks those two boxes and functions as a full-fledged seller’s market.
Along with monumental price gains, the average GTA home sells almost 40% faster today than eight years ago.
It’s important to note, days on market does vary based on home type. Given demand is highest for single-family homes, DOM is considerably lower for detached homes than condos, for example.
Days on market and seasonality
Just as prices can drastically fluctuate based on seasonal highs and lows during the year, the same is true for days on market.
In winter, for example, conventionally the slowest time in real estate, studies have shown homes can take upwards of 38% longer to sell compared to the peak spring season.
Therefore, it’s critical to factor in how the season you decide to buy or sell a home influences your housing journey.
Days on market and relisting
How long a property is on the market for has a huge impact on how buyers perceive a home. Therefore, in order to shake off the impression that a property is lingering without a buyer and accumulating its day on market, many agents will resort to relisting.
The process of relisting essentially involves pulling a home off MLS only to promptly list it again in order to reset its day on market back to zero.
While properties are often relisted in order to change their asking prices, in several cases, the strategy of relisting is solely used to show zero days on market as newer listings receive greater attention from buyers than older ones.
A study from TheRedPin found nearly one in six GTA homes were relisted last year. If you’re a buyer intent on a particular home and want to see whether its days on market was reset, your agent can provide you with that information.
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Flickr: Jay Kaye