At the city or area level - the DOM is a good indicator of how well the market is doing or not doing. A low DOM is an indication of a Seller's market. Feb. 2008 for Central Toronto had an average DOM of 26 days. The hottest area in Central Toronto was C10 (roughly from Mt Pleasant Cemetery to Forest Glen and Yonge east to Bayview and West Don River north of Glenvale) with a DOM of 13 days. Contrast that to Feb. 2009. Central Toronto had a DOM of 43 days and C10 has a DOM of 37 days. Definitely more of a Buyers' market.
At the individual listing level it tells me how long the actual property has been listed. I use the number as a loose predictor of how much price flexibilty is in the listing. Obviously, when putting an offer on something that has only been on the market for a few days it is likely that the offer price will be fairly close or at the list price. However, when something has been on the market for 3 months - it is likely that we will go in at a lower price.
When discussing listing a house and using the DOM stat - it is a good predictor of how long it will take the house to sell if properly priced. I always pull the individual listings and manually calculate the DOM - since the number can be falsely low. Some agents list a house for a few weeks or months and if it doesn't sell, terminate the listing and re-list the house. The DOM starts again from day 0 and does not accumulate from the previous time it was listed. A definite flaw in the system. A good agent will always ensure the stats are accurate and will do manual calculations if necessary, and will not rely solely on published stats
So... when going to see a listing with your agent, or looking at an open house - ask about the Days on Market, and whether or not this is the first time it has been listed. Not only will you sound knowledgeable, but this is helpful information when putting in an offer.
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