Does an Increase in Days on Market Impact Sale Prices?
When it comes to real estate, one metric that often catches the attention of buyers and sellers alike is the days on market (DOM) — the average number of days it takes for a home to go from listed to under contract. Recently, Portland's real estate market has seen an increase in DOM, with homes lingering on the market 10 days longer than in 2023; for the month of December, it was a full two week longer than December the year before. What does this mean for sale prices? Let’s explore.
Why an Increase in Days on Market Matters
1. Buyer Psychology
When a home sits on the market longer than expected, buyers may perceive it as less desirable or overpriced. This perception often opens the door for negotiation, with buyers feeling more confident to make offers below the asking price.
2. Market Conditions
An increase in DOM can reflect broader shifts in the market. For example, higher interest rates or reduced buyer demand may cause homes to take longer to sell. In such cases, sellers may need to adjust their pricing strategies to stay competitive.
3. Pricing and Positioning
Homes that linger on the market often signal that pricing may need reevaluation. Sellers might consider price reductions, staging improvements, or enhanced marketing efforts to attract interest and generate offers.
When an Increase in Days on Market May Not Matter
1. Balanced Market Dynamics
In a balanced market, where neither buyers nor sellers have a distinct advantage, an increase in DOM could simply reflect more time for buyers to explore their options. Sale prices might remain stable as the market normalizes.
2. Niche Property Trends
Certain property types or price ranges naturally take longer to sell due to limited demand or a smaller buyer pool. In these cases, the increase in DOM might not directly affect sale prices.
What This Means for Buyers and Sellers
For Sellers:
A 10-day increase in DOM may not seem significant, but it’s worth paying attention to. Homes that stay on the market longer are more likely to see price reductions, so it’s crucial to ensure your home is priced competitively and marketed effectively from the start. Consider working with your real estate agent to refine your strategy, whether that means staging the property, enhancing its online presence, or adjusting the asking price.
For Buyers:
An increase in DOM can offer buyers more breathing room to consider their options without rushing into decisions. However, it’s important to remember that well-priced homes in desirable areas can still sell quickly. If you’re eyeing a property that’s been on the market for a while, you may have more room to negotiate.
Final Thoughts
While a 10-day increase in days on market might not drastically impact sale prices on its own, it’s often a sign of underlying shifts in the market. For sellers, it’s a reminder to stay competitive and proactive. For buyers, it’s a potential opportunity to negotiate. Understanding what DOM means in the current market context can help both buyers and sellers make more informed decisions.
Curious about what this trend means for your home buying or selling goals in Portland? Let’s chat! As your trusted Portland real estate expert, I’m here to help you navigate the market with confidence.
