By Keith Kyle
I’m sure most MLS systems are different but here in the South Bay the days on market on the CRMLS can be a bit misleading. Many buyer and agents use days on market as a negotiating tool….the longer the home has been on the market, the more leverage the buyer has to come in low or negotiate other favorable terms.
The problem is that days on market doesn’t always indicate just how long the home has been available and is not necessarily indicative of “active” status. As realtors when our clients accept an offer we have the option of changing the status to “pending” or “active under contract”. Pending stops the days on market from accruing, but active under contract does not. A home can go into escrow on day one, change the status to active under contract (again meaning it’s in escrow) and if it falls out of escrow 20 days later the days on market for the home will show 20. It’s very misleading as the home has not been available for those 20 days and now puts the seller and listing agent at a disadvantage…..even though it sold the first day.
The other aspect that leads to misinformation is that with this days on market accruing on many home, it does not allow for an accurate picture of the market. For instance a certain area of town or city itself may show an average days on market for a certain month to be one thing….when many of those homes were not actually available. It may show days on market at 45 when the reality is that the homes in the community actually go into escrow after 30.
It’s a problem that needs to be addressed as it can change perceptions….both on an individual home and the market in general.