How Accurate is “Average Market Time?”
One of the most important statistics in residential real estate — at least to prospective home sellers — is a Realtor’s “Average Market Time.”
As defined by MLS, that’s simply the average amount of time it took the Realtor to sell their listings (at 34 days, I ranked second in Edina Realty’s City Lakes Office last year, behind only Minnesota Realtor of the Year Budd Batterson).
Flaws & Weaknesses
And yet, I can think of at least two flaws with Average Days on Market that could easily render it incomplete, misleading, or worse.
One. “Zero Days on Market.”
At one extreme would be a pre-list sale.
Thanks to tools like Edina’s “Network One,” it’s possible for proactive listing agents to find pre-screened, pre-qualified Buyers before the home ever comes on the market. See, “Have a House/Need a House.”
Sometimes, such deals get run through MLS after-the-fact as a COMP (“Came on Market Pending Sale”).
Other times, however, like when the listing agent is swamped . . . they don’t.
Also making it less likely for a pre-list sale to show up on MLS: a (newer) requirement that all input fields be completed.
So, when a 5 BR/4 BA home with 4,000 square feet sells off of tax records, pre-list, the listing agent may not have formally measured everything.
Two. Infinite Days on Market
Which leaves the opposite end of the continuum: listings that never sell because they expire or are cancelled.
Call it “infinite days on the market.”
And yet, because the home never sold, there’s no effect on the listing agent’s sales statistics.
In theory, at least, a Realtor who sold exactly one house in 15 days, yet had five more on the market for an average of one year that never sold, could say — with complete honesty — that their “Average Days on Market was 15.”
You just wouldn’t want them to list your home.