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Formula – Time On The Market
SD – LD = T
SD – Sales date (completed sales only)
LD – Listing date (date first listed)
T – Time on the market
A little similar to months of inventory, the time on the market is an important indicator of how strong the demand in a market currently is.
Only completed sales transacted should be taken into account.
Expressed in number of days, the lower the resulting figure, the higher the determined demand.
Often used together with the spread to spot trends, it provides an analyst more clarity of current demand and supply in the market.
A critical point to note is that the variables used in the formula has to be restricted to the type of property being researched.
For example, if houses are being looked at, apartments should be left out. In this case, should the calculation include statistics for apartments, then the result of this equation is not dependable as it is not specific enough.