The National Association of Realtors reported in its last existing-home sales report that single-family homes stayed on the market for an average of 34 days in June, unchanged from June 2015 but up two days from May’s total of 32.
A number of factors can determine how many days a home stays on the market, such as the listing price, housing characteristics, and amenities. Building on an earlier two-part analysis by CoreLogic Director of Analysis Matt Cannon, CoreLogic Principal Economist Bin He found that public listing comments can affect how many days a home stays on the market after controlling for list price, geographic variations, and housing characteristics.
“After all, public comments that listing agents provide contain additional information about the property amenities, property architecture and neighborhood information, among other things,” He said.
Days on the market is defined as the time between the date the property is listed and the date the contract is signed; the CoreLogic study examined more than one million single-family transactions that closed nationwide during 2016. Distressed properties were excluded since they often sell faster than non-distressed properties and are usually heavily discounted.
Cannon’s study originally analyzed the impact of public comment on days on the market by extracting pairs of words after raw public listing comments were converted to quantitative information using a document-term matrix.
“After all, public comments that listing agents provide contain additional information about the property amenities, property architecture and neighborhood information, among other things.”
Ben He, Principal Economist, CoreLogic
“Days on market can vary significantly across different geographic areas, and hence geographic variation can mask the information contained in listing comments,” He said, adding that in his analysis, “geographic area variation was controlled so that we can better understand the specific impact of words from listing comments with days on market.”
The study found that properties with features such as “fenced backyard,” “open concept,” “natural light,” and “updated kitchen,” tended to sell quickly while word pairs such as “golf course,” “gourmet kitchen,” “ceramic tile,” and “granite countertop” attached to properties tended to increase the number of days a property stays on the market. The word “fence” appeared frequently among the top word pairs, indicating it is a top priority for buyers; meanwhile, homes listed as “single story” tended to sell more quickly, while “two story” had a tendency to increase the number of days a property stayed on the market.
“It is not easy to figure out why properties with ‘gourmet kitchen’ stay on the market longer, but one possibility is that this luxury feature would lead to a higher property value,” He said. “Homes that have higher prices relative to their neighbors may have less demand than lower-priced, more affordable homes, and hence it takes a longer time to sell.”