Average days on market? When do we draw the line?

Ive been sussing out a new way to search for properties of interest.... Already dangerous haha

As the market is generally cranking across most the east coast of Australia right now, its certainly a lot harder to find the right properties for my individual circumstances.

In turn, I've been upping the average days on market to open the door to more areas worth investigating. However I don't know exactly where to draw the line??

Im looking at areas sub 450k under 80 days? This isn't crazy is it?

E.g Perth is currently at 87 days in their down market??

Please excuse my ignorance, any advice would be greatly appreciated.

Thanks!

 

I don't get why the average days on the market in an area would correlate to a potential purchase?

 

In my view, if your looking at an area overview and properties generally sit for say 100+ days there's no demand.... Or not as much anyways??

This is part of my lack of understanding I guess. What do we need to consider if anything to consider at all

 

I see. I guess maybe I see where you're coming from???

Its not really a stat I would use in isolation though, especially because by the time the average days have shortened considerably, then its probably too late.

 

I probably should have said from the start, I'm using the average days on market as part of a search with other variables.. Block sizes, access, yields etc.. That whole deal

 

Days on market can reflect several things:

• Desirability (or lack of)
• Incorrect pricing
• Unreal vendor expectations
• Lack of demand
• Poor agent strategy/marketing
• Structural issues
• No compulsion to sell
• Regional issues (eg. new mine next door approved but not commenced operations, main industry closing down etc, new road very close but not built etc)

 

But that is why you need to ensure the focus is on not one property but a particular area/suburb and particular product and it must include all properties, not one.

 

Just throwing it out there for the hell of it, why not look at a couple of areas in Newcastle, apparently this market has been strong for at least 2 years. What is the average days on the market. This may be a fruitful exercise.

I would expect hot/strong markets should be selling at least within 4 weeks. However, this is only part of the puzzle, its very important to also find out how long a particular suburb/area has been booming and what product is selling, and who is buying

 

Here is another lead, listings are selling within 1 week in Hobart, that has to tell you something and not to mention recent post by @See Change where he posted info on Tassie economy performing well.

Link below ABC News

Record real estate prices predicted to continue in Hobart

 

To be honest, one of my best purchases was a property that was on the market for more than 100 days which could be potentially red flags but I was told by a neighbour that the reason why it was on the market was due to the poor family having a child going through cancer and weren't in the right headspace.

 

Ive actually been following a few outer newcastle areas, way to late for that party! However they are 80 days on market and under.. That said the sales numbers are double most other areas.


I can see some analyst paralysis setting in, my long view and conclusion is anything under 100 days at this stage is worth considering. However you must understand the key reasons and drivers before purchase.

Anything over 100, you need to be able to justify purchase.