DOM can be caused by so many things I am not sure how you could use it as is.

Could be because the neighborhood is bad, could be the tax base is bad, could be the house itself is bad.

Sometimes when I see a large DOM it is because the person thinks they are sitting on a goldmine.

So many people watch shows about RE in other areas and think that is what they can do here. Maybe they got the house because grandma finally died. They have nothing in it, but they want to retire on the sale. They can let it sit because holding isn't that high.

I agree with Map that most times the house is junk.

However, if you are looking at the average time it takes for all rental/sale listings to be leased / sold in a neighborhood, it could be one of many factors considered - part of the big picture.

Thinking that the more desirable neighborhoods would rent / sell more quickly - IF all other factors are equal.

If evaluating an unfamiliar-to-me location as a possible target investment area, I would (have) combine DOMs with school rating, crime statistics, average income & most common employers, ratio of owners to renters, real estate tax rates, etc. Google maps aerial view, too.

All that stuff together gives a good indication of whether the type of tenant I want to work with is likely to be interested in living there. That gives me enough information to decide if I want to go in person.

I'd go drive/walk around on a Saturday or Sunday afternoon & stop to talk to anyone I see out in the yard / walking the dog, to get a real feel for it. I'd ask questions like: How long have you lived here? Have your neighbors been here long? How often do you see emergency vehicles come through? What's the most recent crime you've heard of? How many of your neighbors do you know by name / friendly people?, does this area ever get high water?, Etc. You'll be amazed at how much people will tell you if you are friendly and polite.

DOM is best used as an overall trend. If average DOM is under 90 then it's considered a sellers' market, if it's over 90 days then it's considered a buyers' market. The other one that goes hand-in-hand is offer-price / ask-price. You generally see the later inch down as the average DOM goes longer. This cycle has so-far been the exception because higher interest rates are keeping people in-place with less motivation to move.

An individual properties DOM can be used to make lowball offers, I did that pretty successfully for a few years hitting anything over 180 DOM and later down to 90 DOM before it became a total sellers' market and that strategy no longer worked.

If you want to see the neighborhoods where the investment $ are flowing, then look at the building permit addresses. Get the list from the city and then upload a CSV file into google maps. Where you see all the pins gathered in one neighborhood is where the gentrification is happening.

Over priced, determines DOM, generally.

It is an awesome indicator for the general direction of the marketplace overall. I use it to see if it is trending upward or downward.

The past couple of years it has looked more shotgun-ish though. Winter thing to slow things down a bit but last year, that didn't occur much at all with the rather mild winter.

I am not all that sure if I would use it for specific neighborhoods. Some locations, I just plain old just avoid. If the DOM is increasing, would you want a house located near a dog food plant and the sewer plant? I look for ease of management.