Key Investment Tools: Average Days on Market

15th October, 2015
  • In real estate, the average days on market refers to the average amount of time that properties spend before being purchased or rented.

    This measure can refer to the amount of time it takes a real estate agent to move a property on average, or to the amount of time that properties spend on the market within a given area. It is an important measurement because it can indicate several things to potential investors.

    First, it can tell an investor that an area they are interested in a buy-to-let property tends to move properties slower than in other areas, and, therefore, may indicate that they could have a difficult time seeing a return on their investment.

    Otherwise, the average days on market number could indicate to an investor that the property they are trying to move is not properly priced or has some other problem that is keeping it from moving as fast as other properties in a given neighbourhood.

    For example, if the average days on market is 240 for a given area, and a property has been on the market for over a year, it could indicate to that investor that there is something less than desirable about that property to potential renters.

    It could also be a sign that the property is priced too high and that potential tenants are simply not interested in paying that amount for a property in that area.

    However, one thing that it is important to remember is that if a property does exceed the average days on market, this is not always an indicator that there is a problem. Sometimes it is worth one’s while to wait rather than to adjust the price of a property, even if it is taking longer to move that property.

    While average days on market should be taken into consideration, there are many reasons that a property may not be moving in accordance with the amount of time that properties are rented or sold in an area on average.


    by: Prime Asset Investments

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