The time a property has been on the market may reveal a great deal about the property, and how well it was initially priced and marketed, etc. Aggregate market-time statistics, especially when viewed over time, reveal a great deal about changing market conditions.
Real estate brokers used to “cancel and relist” a property in order to restart the days-on-market counter. Changes in Multiple Listing Service policies over the years have made it more difficult to manipulate market-time statistics and now give a clearer picture of the market.
There’s still a major loophole that can be exploited by any real estate firm that represents new construction projects. Here’s how it works. If you have 100 units for sale in a project, you only list 10 of them in the MLS. As you sell unlisted units in the building you enter them into the MLS and mark them sold. The market time on these units looks great. If your listed units haven’t sold after, say, 90 days, take them out of the MLS for 90 days and enter 10 different ones. Do this often enough and you can significantly distort your overall days-on-market statistics.
The take-away for sellers: be deeply skeptical of the numbers you’re given by any firm that touts significantly lower “days-on-market” than its competitors. But pay close attention to the numbers: they may provide useful information about a firm’s business ethics, if not its marketing prowess.
The take-away for buyers: market-time data may be significantly distorted, depending on how widespread this practice is, in local sub-markets with a lot of new construction activity.