Simply put, “Days-on-Market” tells you how long the active properties currently for sale, in aggregate, have been on the market (a.k.a. “time on market”). Said otherwise, “of the active listings currently available for sale, how long have they been for sale?”
Compare this to “Time to sale” which is used to describe only those selected properties that sold and is a statistically different measurement. “Time to sale” only looks at those properties that sold vs “time on market” which looks at all active listings as defined above.
Most importantly, while the values of the Re/Max Accord's “days on market” and the “time to sale” may not match, you’ll find that these numbers are closely correlated. Both values will rise in weaker markets and fall in stronger markets.
The Days-on-Market number that you see here on remaxaccord.com and in your Market Reports is a “cumulative” number. So what does that mean? Sometimes listing agents will pull a listing from the active market and re-list the property in the near future–maybe a couple of weeks or months down the road. This is a common action for an agent to take if a property has been on the market for an extended period of time or if the property will have its price reduced. Frequently, this also resets the days-on-market number back to “0 days” in the local MLS search. By re-listing the property, it can appear to be “new” in the local market because new buyers in the market may not have seen the property previously. But, that doesn’t really tell you what the true “days-on-market” value is in that market.
To correct for that, we calculate “Days-on-Market” as a cumulative number, which means if a properties leaves the active market and is relisted again within a 90-day period, we assume that they property was never really “off the market”–more like “it was taking a break.”
Because local MLS boards have different rules for reporting market statistics and for relisting properties, using the Altos Research “Days-on-Market” number insures that you are getting a truly consistent and reliable count for “Days-on-market” in your local market area. Additionally, if you are comparing market areas that have different MLS Boards, using the Altos Research “Days-on-Market” allows you to compare markets consistently instead of trying to guess how one MLS area calculates days-on-market vs. another MLS area.
Finally, you can compare “Average Days-on-Market” to “Median Days-on-Market”. It is common for the “Average Days-on-Market” to be much higher than the “Median Days-on-Market.” If that is the case in your area, it means that new properties getting listed are selling faster than properties that have been on the market for a while.