Insider: How Long is Too Long? An In-Depth Look at ‘Days on Market’ in Real EstateLIV Sotheby's
One of the main reasons people love living in Colorado is because of the state’s variety of lifestyles. From the unique urban neighborhoods of Denver, to tech-rich Boulder, the foothills, and the mountain resort communities that boast year-round recreation, real estate is selling! But how fast? A word we often hear when contemplating buying or selling a home is Days on Market, which is a term that describes how long a home has been for sale. Just as important as knowing the term, is knowing that Days on Market varies greatly depending on the area where you buy or sell. So, what is a good number of Days on Market? It depends. While the number of Days on Market throughout Colorado are typically less than national averages, unique markets require skilled expertise and smart positioning when marketing your home. Since the number of days a home sits on the market has a direct effect on the price the home will eventually sell for, knowing your market and working with an experienced real estate professional to price and market your home effectively, depending on your area, ensures your home won’t remain on the market for one day longer than it should be.
Naturally, most sellers want to price their homes at a level that will net profits from the proceeds, however, it is imperative that a home seller does not price their home too high. Overpriced homes tend to have longer-than-average Days on Market, and unfortunately, once a seller comes to the determination to lower the price he or she has set on his or her home, it has been on the market so long that any potential buyers may see less value in the home since no one else has bought it.
Typically, an agent representing the buyer will look at the Days on Market of a property when helping a buyer write an offer to purchase a home. If the number of days on market is extensive, it is more likely that the seller will accept an offer lower than the price that is listed for the home. The agent will submit an offer that is lower than the asking price. Although a seller does not have to accept the offer, the likelihood he will get a higher offer is slim since the perceived value of the home has significantly lessened since it first entered the market.
Establishing the Right Price
It is possible to avoid losing thousands of dollars in property value by setting the price right when the home is first put on the market. It is vital to compare homes similar to yours that have recently sold, and to price your home closely to what those sold for. This way, you’ll be ahead of the market and competitively priced among all the other homes that are not in line with what the market is telling them.
Summer Selling Means Less Time on Market
The average number of Days on Market are typically less in summer months than in winter. In January 2017, average Days on Market in the Denver metro area was 31, compared to only 21 Days on Market in April 2017, demonstrating a significant 32% decrease as we move into the summer selling season. The Boulder real estate market demonstrated a similar trend, with 82 Days on Market in January 2017, decreasing 37% to only 52 Days on Market in April 2017. Few Days on Market typically represent a strong seller’s market where tight inventory is coupled with strong demand.
Days on Market in Resort Communities
Based on their location in desirable, slightly less accessible places than national mainstream markets, the number of days a property stays on market within resort communities is typically longer.
In Summit County, the number of average Days on Market in January 2017 was 75, compared to only 60 Days on Market in April 2017, demonstrating a significant, 24% decrease as we move into the summer season. The Vail Valley, with its plethora of luxury homes at higher price points, demonstrated a slight increase in Days on Market with homes remaining on market for 151 days in January 2017, increasing 11% to 206 days in April 2017. This is a normal time frame in the home buying sector within the Vail Valley, because in resort markets like Vail, many homes are vacation properties and there is not as much demand or urgency compared to major metropolitan markets. If a property sells in less than 30 days, it considered as sold ‘quickly’, and usually means the property was well priced, had a prime location, and was either recently remodeled or a new property.
Because the number of Days on Market depends so greatly on where you live, it is imperative to work with an experienced broker professional to ensure the best positioning when marketing your home. Consult an expert and you will be well on your way to buying or selling your home in the best time frame possible.