TREB to Adjust Days on Market Data
April 11, 2019
TREB to Adjust Days on Market Data – Back on November 15, 2018, we wrote about how the Toronto Real Estate Board (TREB) was misleading the public by not accurately reporting the Days on Market for a sold listing.
For years, TREB heard from its members that the market statistics it kept was missing some crucial information. Now it is getting closer to providing its more than 50,000 members with more accurate data. For example, it takes about 11 more days to sell a home in many of the sub-markets across the Greater Toronto Area than the currently published statistics suggests.
“Days on Market” or “DOM” is a term that has stirred up a lot of confusion for realtors and the public. It seems that there are many individuals in the Greater Toronto Area who do not know how long it takes to sell the average home.
DOM is calculated as the amount of time a single listing lasts in the system before it is recorded as a sale. Because the system has been set up this way it is missing some of the accumulated days a property spends on the market from previous listings, terminations, price changes as part of a new listing and other activity.
Since January 2003, the average spread between the ‘Avg. LDOM [listing days on market]’ statistic and the new ‘Avg. PDOM [property days on market]’ statistic was approximately eight days. In February 2019, the spread was approximately eleven days.
In February 2019, 20% of sold listings were part of a relist cycle, and over the entire study period, the average was 16%. During the time where the housing market was under stress the volume of sales via re-listings spikes. For much of 2017 and 2018, the share of homes sold as part of a relisting cycle hovered between 25% – 30% of all sales.
In Markham, a listing at 46 Clover St was first terminated on May 28, 2018, and subsequently terminated four more times before it was finally sold on December 13, 2018. The property was on the market for a total of 198 days, but TREB will only record the 24 days it took to sell the property after the final termination.
In Stouffville, a listing at 15 Coronet St was on the market in November 2017 and was cancelled and relisted three more times before selling on December 27, 2018. The property was on the market for a total of 373 days. TREB will only report the property being on the market for 28 days.
Now that the research shows there are some meaningful gaps in the data, the PDOM stat will make its way into future TREB monthly market reports. DOM has always been a lagging indicator that describes where the market has been, but perhaps in the future, the spread between the PDOM and LDOM will be a number worth watching. The number will provide another snapshot of the marketplace for sellers and buyers and give realtors another tool when discussing the current state of the market.