The Most Obscure Stat Award

This article in the Calgary Herald is just bizarre - "Condos on the market for less time"

The number of condominiums listed for sale on the Calgary Real Estate Board's MLS system during July totalled 890, down from 918 for the same month last year.

But on a year-to-date basis, the 7,967 new listings this year are nearly 22 per cent higher than for the same seven-month period in 2009.

On average, though, people are taking less time to make the buying decision. This year, the average length of stay on the market is 44 days compared to 53 a year ago.

Overall, the condo segment of the 2010 edition of the resale market is seeing lower sales, higher listings, and slightly - prices.

After reviewing the data the main story is that condos are not on the market as long? Really? Even with sales down 44% and inventory up 55% from the same time last year? Remember DOM only applies to properties that have sold and does not include the amount of time if it has been unsuccessfully listed in the past.

The figure mentioned in the article is the year to date days on market. Looking only at the month of July this number increased to 51 from 50 the same time last year.

Calgary: Are homes selling quickly?

From Bob Truman's what's new page (emphasis mine):

Feb 20
With 4690 single family homes on the market, we have more than double the inventory compared to Feb 2007, yet prices continue to rise and the time required to sell a house has gone down dramatically. Over the past week, it took an average of 37 days for a home to sell. In January, the average was 50.

This may be pedantic but I would like to point out that there is a difference between the Days on Market (DOM) and the time required to sell a house. Sales are low and inventory is high so how could homes be selling faster? Here are a set of factors that may be impacting Days on Market:

• Days on Market does not account for the time if a home was previously listed on the MLS. Sometimes homes are relisted so that they appear "fresh".
• Days on Market is calculated from the set of homes that actually sell. Homes that remain listed are not included.
• In December the portion of newly listed homes is smaller because there are relatively few new listings in November and December and many remaining listings from spring/summer. In February there is a higher proportion of newly listed (and relisted) homes.

Another stat to consider is the Month Of Inventory. This represents the amount of time at the current sales rate it would take to sell all the inventory.

SFH from Feb 1-20 (Mike's Site)
Sales: 827
Inventory: 4703
MOI = (4703/827)*(20/30)
MOI = 3.8 (buyer's market)

Days on Market (DOM)

This post will explain why Days on Market (DOM) is not a great indicator of market trends. Bob Truman has mentioned this a few times on his widely viewed blog so I thought It would be worthwhile to dig a little deeper here.

From DailyStats.ca (what's new):

Jan 24
15% of the single family homes listed this month have already sold or conditionally sold. Average DOM was 11.

Jan 23
Homes are now starting to sell faster. Days on Market(DOM) last week was down to 48. It was as high as 62 during the last week of December.

By Jan 24 the days on market for properties listed and sold in the same month could not possible exceed 23. If they were all listed on Jan 1 and sold Jan 24 that would be 23 days on market. I would expect that this average would end up being half that as the listings and sales being distributed through the month. So average DOM of 11 is not very meaningful.

Without even looking at the stats I can say that all the homes listed in July that have sold in January have an average DOM of over 150.

Days on Market only includes properties that have SOLD. It does not include ones that remain on the market. If there is a a low level of sales and high inventory it is possible that the new listings are selling more often while the others sit.

Days on market can be reset by relisting on the MLS. Its no secret that this is occasionally done to make a listing appear fresh and increase the chance for a sale.

Also, consider the report from Comfree Edmonton.

Ave. Days on Market: 64

But looking at the unofficial stats from "leendart" posted on the bubble blog shows Active Average DOM on Dec - 29 to be 111. Also this number would be higher if data collection started earlier and becomes more accurate over time. See unofficial stats weekly and monthly.