DOM is a very unreliable stat. It comes from the MLS, and agents routinely pull a stale listing and then reenter it w/in minutes. If the home sells the next day, the DOM shows as one day, not taking into account the past history. Also, about 50% of homes listed right now fail to sell. They expire or are withdrawn. Most of the sellers eventually list again shortly afterwards. Again, the MLS only takes into account the latest listing period.
If you want a reliable stat to determine which way a market is trending, you need to use the absorption rate. And figure this # out for your neighborhood, not the entire city or area. There are HUGE differences between even neighboring communities.
This stat shows you how long it should take to sell all of the current inventory at the current selling rate. For example, if your neighborhood has 10 homes currently for sale (including yours, and the past 12 months there were 12 sales, then the absorption rate is one sale/month and there is about 10 months worth of inventory in your neighborhood.
Now, the way to use this info, is to figure out what it's gonna take to make sure that your place is going to be one of those homes that sells every month, w/o going over that 10 month mark.
Knowing all of this is a great way for sellers to narrow down to a good agent vs. a great agent... one that really undrstands your neighborhood's dynamics.

When we were selling our house I pulled the activity reports on a number of houses that had sold or were on the market. Some of the houses that on the comps were showing quick sales had actually been on the market for years!

We are looking at houses now to buy and I always pull an activity report on any house that I am considering. It is often highly interesting.

It does at times make me wonder about what the seller is thinking. For example, there is a nice house on acreage that we saw listed. It has lovely pictures and appears to be very updated, etc. It is on a busy street which is a negative. The seller originally listed it just over a year ago at a particular price. A few months later they dropped the price - $1. The listing recently expired and it was put back on the market a day or so later at the same price.

I take it as a given that any house that has sat on the market for 6 months or more and hasn't sold is overpriced for the market. As a seller -- I recognized that and dropped my price. I am truly baffled by those sellers who don't do that. I see house after house that I know is overpriced because, well, it hasn't sold. I see some houses that have been on the market off and on for years with price reductions that are clearly insufficient.

I just saw a listing of a house I really like although for various reasons would appeal to a limited pool of buyers. The current owners put on the market a little over a year after buying it. They put it on the market at 10% more than they paid for it. I pulled the prior listing and all the really nice updates in the house were put in before they bought it. Houses are just not going up 10% in this market.

There just seem to be so many sellers who have wishful thinking about what their houses will sell for and who just keep the house on the market at prices that are too high. I can understand not wanting to sell at those prices in which case take the house off the market. But if you want to sell then I don't really understand letting it sit for 6 months, a year, or 2 years without reducing the price to one where the house will sell. (And I say that as someone who had to bring a check to closing when we sold our house so I understand how it is hard to do it but sometimes it is what you have to do if you want to sell).

What the others said. I've seen plenty of places that have been following the market down for years, always priced just too high to be desirable. For instance, in the townhouse complex I'm monitoring, there's one that just went up as a short sale--DOM is something like 15.

But I viewed it last summer with a friend and the realtor told us then that it had been on the market since 2008, always priced a tad too high and the seller always unwilling to negotiate the price.

In my current complex, also, people ask too much and blame the realtor when it doesn't sell, so they get a new agent every three months and never have a high DOM when it really should be aeons long.

I think DOM become irrelevant in the market unless it exceeds 180 days
Multiples buyers have issues with lending/financing (either their credit or appraisal) and if the sale falls apart it is relisted with a higher DOM.

My areas (Northern NJ) depends on whether it is a higher price home or moderate price home. The higher price stuff stays over 90s and some lower price about 60d but there are always exceptions which have multiple bids.

My area is theoretically an area that isn't that bad and was never a big "bubble" area. That said -- we are currently looking at houses and it is the exception to see any that have less than 180 cumulative DOM.

To some extent that is because of the type of house we are looking at (1 to 5 acres). That said, I am blown away by the number of "sellers" who just let the house sit without making the price reductions necessary to get it sold. I often see houses in the listings that have never had a price reduction and have been on the market over 6 months! Or -- even worse -- they were on the market, didn't sell, terminated the listing, and came back at a higher price....