What does days on market actually tell me?
It is a measure of pricing, not of quality. A property well above the local median days on market is priced above what buyers will pay, and that is negotiating leverage.
In an active segment, well-priced properties sell in days. Something sitting for two months in that market is usually priced wrong, occasionally has a real problem, and always has a seller who is more flexible than they were on day one.
Read it against the local median rather than in absolute terms, because a normal marketing period differs sharply between a downtown condo and a rural property.
The number can also be laundered. A listing terminated and relisted starts the count again, which is why price history matters more than the current days on market. If a property has been on and off the market for six months under three different listings, that is what you are looking at, regardless of what the count says today.
Next questions
How do I tell whether a house is overpriced?
Compare it to what similar properties sold for in the last ninety days within a few blocks, adjusted for size, condition and lot. The asking price is a marketing decision and tells you nothing about value.
Market practice
How do bidding wars actually work in Toronto?
The property is listed below market, offers are held to a set date, and you bid blind: you are told how many competing offers there are but not what they contain. Winning usually requires no conditions, which is where the risk sits.
City of Toronto