Real Estate - Days on the Market

One of the best ways to determine if the real estate market is balanced, a buyer’s market or a seller’s market is to research how long homes stay on the market. Yes, there are many intangibles and factors but on the average, the days on the market (DOM) is a good indication for negotiations. It also tells me the real estate market has indeed changed over the past three year period. Not analyzed as a statistic but as a matter of fact. 

In 2010, if you were a buyer, you were king and you could negotiate closing costs and even a better price. In 2013 – not so much! In late 2012, the market changed overnight to a seller’s market.

 

In my opinion, sellers have started to think their homes are worth more than the market will bear. Yes, homes have increased in price due to lack of supply and pent-up demand and not because of the positive spin the national media is presenting every night on the health of the economy. The media is trying to change the psychic of us from fear to optimism. In my humble opinion, it will not work because we are not sheep.

In 2014, it will be the tipping point for real estate and not just because of the historic cold and not because of global warming. Fear will not disappear and sellers will be reluctant to sell and buyers will be reluctant to buy.

One way to test this theory is to revisit the average days on the market at the end of this year. I continue to say --- Pray for the best and plan for the worst.