A home seller recently asked me: “What’s a better indicator of when our house will receive an offer: average length of time on the market in our neighborhood, or number of showings?”
Here’s how I answered:
Average length of time on market in your neighborhood doesn’t mean much; it all depends on how the houses are priced. Let’s say your neighborhood has very similar homes–same approximate age, size, lot size, condition, etc. And let’s say that the market price for such a home is $500,000. Well, if all the homes are priced around $575,000 and have an average of 200 days on market, then the houses are overpriced–as we know from our example. But if you put yours on the market at $500,000, it probably would sell reasonably quickly.
Another example. Same community. Three houses were on the market. One was priced at $500,000 and sold in 20 days. One was priced at $525,000, and sold in 100 days. One was priced at $550,000 and has been on the market for 180 days. So you could look at the averages: Average sales price of $525,000, average days on market 100 days. But that really doesn’t tell you anything. What you need to know is that houses sell quickly at $500,000. They take quite a while at $525,000. And they may never sell at $550,000.
So, days on market really is just a function of price and marketing.
Number of showings is a lot more relevant. You can assume that most of the people viewing your property are looking for homes that meet the general description of your home (number of beds and baths, etc.) in your general price range. To use the example above, the people who are going to be looking at those homes probably want to spend between $500,000 and $525,000 on your sort of house. So, a lot of showings means that your home is attractively priced for what it is and where it is. Few showings means that your home is overpriced.
So, if there’s nothing wrong with your home (some terrible odor, or backing up next to a freeway that isn’t apparent in the listing), the more showings you have, the more likely it is to sell sooner. It’s all a numbers game. I know some agents who have various rules of thumb, such as: An offer should come in for every 10 (or 15) showings. Obviously, the number varies. But you get the idea. If that’s not happening, then there may be some problem with the house that people don’t find out about until they’re there.
So, number of showings is a very good indicator. Average length of time in your neighborhood is a very poor indicator.