So you’re cruising through Zillow and fall in love. It has the porch, the finished basement and even a roof deck! Oh but wait…it’s been on the market for 90 days…there must be something wrong with it, right? Last quarter of 2021 in Philadelphia, the median Days on Market (DOM) was 31 days. In the Philly Suburbs (Bucks, Chester, Delaware, and Montgomery Counties,) it was 8 days. If a listing strays from these numbers, you may think it’s not worth looking at because there’s got to be something wrong with the house. Don’t omit them from your search just yet! There are some common reasons why DOM may be more than expected.
Pricing
Often a home that’s been on the market for a long period of time comes down to the price. If the home is unique and in a neighborhood with listings at considerably lower prices, it will be slower to sell. After all the only detached home on the block with a gated driveway will likely sit on the market longer than the standard row home around the corner. Many sellers choose to list at the top of the range, after a few weeks they may decrease the price, but those first 15 days are still clocked into the total.
Timing
Timing goes hand in hand with pricing. Buyer sentiment changes like seasons throughout the year. Some changes are predictable, like expecting a lot of buyers during “Spring market,” but some are not, like a news event. If a listing goes live right when buyers become less motivated, it may stay on the market longer, which turns more buyers off. Don’t be discouraged to look at homes with longer DOM right after a busy real estate season for this reason! You may even find a home with a price reduction.
Type of Property
It is not a mystery that smaller homes may take a bit longer to sell. Perfect for a single person, or a minimalist couple, but not for a growing family. Condominiums also pull from a smaller buyer pool. Paying monthly HOA fees for amenities like covered underground parking (yes please!), a 24-hr gym at your disposal or a rooftop pool isn’t for everyone. Last quarter of 2021 in Philadelphia, the median days it took to sell a condo was 41 days, versus 21 days for other residential properties.
Accessibility
When a listing has a restrictive showing schedule, it can increase the DOM. Perhaps it is occupied by tenants or owners. A couple with a newborn baby for example may have a more restrictive showing schedule than a vacant home. Fewer people viewing the property means fewer possible offers. If you’re flexible and patient, lean on your agent to help get you through the door.
Environment
Listings next to a new construction or rehab project can take longer to sell as the noise can deter potential buyers, especially now as more people are working from home during the day. Even the curb appeal next to construction can affect buyers’ interest and DOM starts to stack up. The good news is all construction eventually comes to an end!
Photos
Some listings sit longer because of dark and blurry pictures, or no pics at all. Every PHG agent can tell you a time when they arrived for the showing and the property was not what they were expecting. Sometimes it’s a funky layout that you couldn’t tell from photos, or it could be beautiful original details that you couldn’t see in the dark photos. These properties tend to be the ones that need some work or have tenants. Don’t be discouraged by DOM for these properties if you’re an investor or if you’re looking for a project.
We’ve even seen listings sit because the seller thought everyone would love their orange cabinets or red walls. The truth is, most people have difficulty seeing past bold colors on walls, and it can cause a home to have a longer DOM.
Back on the Market
Once a home goes under contract, conditions have to be met in order for the sale to close. If one of those conditions are not met, the contract is void, and the listing may go back on the market. Commonly, this happens when the buyer cannot finalize their mortgage or something comes up on the inspection report that they didn’t like. If it’s the former, the long days on the market could have nothing to do with the home!
If it’s because of the inspection, keep in mind everyone has different inspection stressors. A leaky roof for some may be a deal breaker, but maybe you’ve patched a roof or two in your day. The silver lining is anything that the seller knows about from the inspection has to be disclosed to new potential buyers. Sometimes the sellers will actually fix big issues before going back on the market. If not, you now have knowledge of any repairs that need to be made and can write an offer with that consideration, perhaps getting a seller’s assist to cover the costs.
How to Look at DOM
Having been on the listing and buying side of each of these scenarios, we know that a high DOM alone doesn't mean that the house is a lemon. Let your agent be your guide. It’s even possible they’ve already seen the properties that have been on the market for many days. By pulling comps for the area and speaking with the listing agent, they’ll educate you on the home so you can make a decision about putting in an offer.
If you are thinking of a property but want to get to the bottom of why it’s back on the market, we can often help. Give us a call and let’s get hunting!