The 'Days on Market' Statistic in Arequipa: Decoding Its Impact for Foreign Buyers and Sellers

As a licensed real estate broker operating in Arequipa, I frequently encounter foreign investors who prioritize metrics that, while essential in their home countries, demand substantial reinterpretation within the Peruvian context. "Days on Market" (DOM) is a prime example. While it offers a snapshot of market liquidity and demand, its calculation and implications in Arequipa's unique real estate landscape differ considerably from more formalized markets like the U.S. or Europe. Understanding these nuances is crucial for both optimizing your purchase as a buyer and maximizing your return as a seller in La Ciudad Blanca.

Understanding Days on Market (DOM) in Arequipa

At its core, "Days on Market" refers to the period a property is actively listed for sale until it receives an accepted offer. In highly developed real estate markets with centralized Multiple Listing Services (MLS), this metric is meticulously tracked and widely available. However, in Arequipa, and indeed throughout Peru, the situation is more fragmented.

The Peruvian DOM Nuance:

Fragmented Listings: There is no single, consolidated MLS in Peru. Properties are typically listed by individual brokers on various online real estate portals (e.g., Urbania, Adondevivir, OLX), through local newspaper classifieds, or via word-of-mouth networks. This fragmentation makes an accurate, universally reported DOM statistic challenging to calculate definitively.
Informal Market: A significant portion of real estate transactions, especially for land or smaller residential units outside prime urban areas, occurs entirely informally (known as tratos directos or direct deals), without formal listings or extensive broker involvement. These transactions, by definition, fall outside any DOM calculation.
"Listing to Offer" vs. "Listing to Close": Critically, DOM generally measures the time from the property's initial listing to an accepted offer. In Peru, the period after an accepted offer but before the final title transfer (closing) can be substantial due to the rigorous notary and public registry (S.U.N.A.R.P. - Superintendencia Nacional de los Registros Públicos) processes. This closing period, which involves drafting the Minuta (draft public deed) and signing the Escritura Pública (final public deed) before a notary, is not typically factored into the DOM metric itself. However, it significantly impacts the overall transaction timeline, a distinction paramount for foreign investors.

Therefore, when discussing DOM in Arequipa, we primarily refer to the visible period a property has been actively marketed before a buyer commits with a formal Letter of Intent or a signed Minuta.

What a High Days on Market (DOM) Means for Buyers

A property with a noticeably high DOM in Arequipa – perhaps 6-12 months or even longer, depending on the property type and location – sends a clear signal.

Opportunity for Buyers: Negotiation and Selection

Leverage for Negotiation: A prolonged presence on the market often indicates that the seller's initial asking price may be unrealistic for the current market conditions, or the property possesses certain attributes that deter buyers. This provides significant leverage for you, the buyer, to negotiate a lower price.
Less Competition: Properties with high DOM are less likely to be subject to bidding wars, allowing you more time to conduct thorough due diligence without feeling rushed.
Market Sentiment Indicator: A high DOM for multiple properties in a specific area can indicate a cooling market, oversupply, or shifting buyer preferences, which can further strengthen your negotiating position.

Potential Issues & Enhanced Due Diligence

While high DOM offers negotiation advantages, it also flags potential underlying issues.

Pricing: The most common reason for high DOM is overpricing.
Property Condition: Hidden structural defects, extensive maintenance needs, or outdated features could be a deterrent.
Legal/Documentary Complications: Unresolved title issues (problemas registrales), disputes with neighbors, or zoning restrictions (e.g., in historic zones) can stall sales.
Undesirable Location: Factors like excessive noise, poor access, or proximity to undesirable elements can increase DOM.

Step-by-Step for Buyers when Facing High DOM:

Research Comparables: Work with your ArequipaRealEstate.com broker to identify similar properties that have recently sold, noting their pricing and presumed DOM. This helps establish fair market value.
Inquire About History: Ask your broker direct questions about the property's listing history. Has the price been reduced multiple times? Have previous offers fallen through?
Commission a Thorough Property Inspection: This is non-negotiable. Engage a reputable local architect or engineer to assess the structural integrity, electrical systems, plumbing, and general condition of the property.
Engage a Local Real Estate Attorney Early: Before making any formal offer, a Peruvian attorney specializing in real estate will conduct a comprehensive Estudio de Títulos (title study) with S.U.N.A.R.P. to uncover any liens, encumbrances, or ownership disputes that could be stalling the sale. This is your primary "safety check" and absolutely critical for securing your investment in Peru.
Prepare for Longer Negotiation Cycles: Be patient and strategic. Your initial offer should reflect your findings from the inspection and legal review, with room for counter-offers.

What a Low Days on Market (DOM) Means for Buyers

A property that sells quickly (e.g., under 90 days, or even less in prime Arequipa neighborhoods like Yanahuara or Cayma) suggests a different market dynamic.

Implications for Buyers: Competitive Environment

Strong Demand: Low DOM indicates a desirable property, priced appropriately, in a sought-after location.
Competitive Bidding: Be prepared for multiple offers, which can drive up the final sale price.
Time Sensitivity: You will have less time for extensive due diligence before making an offer. Speed is of the essence.

Step-by-Step for Buyers when Facing Low DOM:

Be Prepared (Financially): For foreign buyers, cash offers are generally preferred in Peru as local mortgage options are extremely limited and complex for non-residents. Ensure your funds are readily accessible.
Act Quickly with a Strong Offer: If you find a property that meets your criteria and has a low DOM, be prepared to submit a competitive offer promptly, potentially above the asking price if the market dictates.
Include Robust Contingencies: This is your crucial "safety check." Your Letter of Intent or Minuta must explicitly state contingencies for:
- Legal Due Diligence: A satisfactory S.U.N.A.R.P. title study by your lawyer.
- Property Inspection: A satisfactory structural and condition report.
- Financing (if applicable): Though rare for foreigners, if you are pursuing local financing, this must be a clear contingency.
- Zoning & Usage: Confirmation that the property's intended use (e.g., residential, commercial) is permissible by the municipality. These contingencies allow you to withdraw your offer or renegotiate if significant issues are discovered after your offer is accepted but before the final Escritura Pública is signed.
Work Closely with Your Broker: A local expert from ArequipaRealEstate.com can provide real-time market insights and help you craft a compelling offer while safeguarding your interests.

What a High Days on Market (DOM) Means for Sellers

If your Arequipa property has been sitting on the market for an extended period, it's time for a critical re-evaluation.

Signals for Sellers: Re-evaluation Required

Overpricing: The most common culprit. Your property is likely priced above its perceived market value.
Poor Presentation: Lack of professional photos, vague descriptions, or a cluttered, unmaintained property can deter buyers.
Accessibility Issues: Is it easy for prospective buyers to view the property? Restricted viewing times can be a problem.
Hidden Defects/Legal Issues: Unaddressed problems with the property's condition or documentary issues (saneamiento legal pendiente) will invariably lengthen the sale process.

Step-by-Step for Sellers with High DOM:

Re-evaluate Pricing: Work with ArequipaRealEstate.com for a fresh market appraisal. Compare your property to recent sales in the area, not just active listings. A strategic price reduction often triggers renewed interest.
Improve Property Presentation: Invest in professional photography. Ensure the property is clean, decluttered, and well-maintained. Consider minor repairs or a fresh coat of paint. Staging can make a significant difference.
Review Marketing Strategy: Is your property listed on all relevant local portals? Are the descriptions compelling and accurate? Are you reaching the right target audience (e.g., local families, expats, investors)?
Be Open to Negotiation: If offers come in below your asking price, consider them seriously. Factor in the costs of holding the property longer (utilities, maintenance, annual property taxes known as Impuesto Predial).
Prepare Documentation: Ensure your property title (Escritura Pública), latest property tax receipts (HR y PU), and your DNI (Documento Nacional de Identidad) or Carné de Extranjería (Foreigner's ID) are all in order and readily available for your lawyer. Pre-emptively resolving any minor title discrepancies or overdue taxes can significantly shorten closing time once an offer is accepted.

What a Low Days on Market (DOM) Means for Sellers

A property that sells quickly in Arequipa is a clear indicator of a well-executed strategy and a favorable market.

Advantages for Sellers: Strong Market Position

Correct Pricing: Your property is accurately valued for the current market demand.
High Demand: The property type, location, and condition are highly sought after.
Efficient Sale: Quicker return on your investment and reduced holding costs.
Potential for Multiple Offers: This allows you to negotiate for the best possible terms, potentially even exceeding your asking price.

Step-by-Step for Sellers with Low DOM:

Verify Buyer's Capability: Even with a quick offer, ensure the buyer is financially capable. For foreign buyers, this usually means proof of funds from a local or international bank.
Maintain Professionalism: Respond promptly to inquiries and facilitate showings.
Have All Documentation Ready: Ensure your Escritura Pública is correctly registered with S.U.N.A.R.P., and all property taxes (Impuesto Predial and Arbitrios Municipales) are current. This readiness can make the post-offer closing process smoother and faster.
Consider Counter-Offers: If multiple strong offers come in, you have the luxury of negotiating for the best price and most favorable terms (e.g., quicker closing, fewer contingencies from the buyer).
Engage an Attorney Early: Once an offer is accepted, your local real estate attorney will draft the Minuta and guide the process through the notary and S.U.N.A.R.P., ensuring a legally sound transfer of title.

Local Context/Warning: Unique Arequipa Factors Affecting DOM

Several factors specific to Arequipa and Peru can distort or extend the perceived "days on market" for foreign investors.

S.U.N.A.R.P. and Notary Process are NOT part of DOM: As stated, DOM refers to listing to offer. The subsequent legal process—drafting the Minuta, signing the Escritura Pública before a notary public, and finally registering the new title with S.U.N.A.R.P. (Oficina de los Registros Públicos)—can take weeks to several months. This crucial closing period is often a surprise to foreign buyers accustomed to faster processes. It's a non-negotiable part of securing your investment in Peru.
Historic Property Regulations: Arequipa's historic center is a UNESCO World Heritage site. Properties within this zone are subject to strict renovation and usage regulations from the Dirección Desconcentrada de Cultura de Arequipa. These regulations can significantly limit a buyer's ability to modify a property, potentially increasing DOM as the buyer pool is smaller, or extending the closing process if specific permits are required before or after the sale.
Language and Legal Barriers: For foreign buyers and sellers, navigating the Peruvian legal system and Spanish-language documentation without expert assistance can significantly extend timelines and increase DOM. Your ArequipaRealEstate.com broker and a specialized, independent lawyer are indispensable.
Limited Foreigner Financing: The scarcity of local mortgage options for non-residents means most foreign transactions are cash deals. While cash can shorten DOM by signaling a ready buyer, it also limits the overall buyer pool for sellers, particularly those targeting local buyers.
Neighborhood Specificity: DOM can vary wildly even within Arequipa. Highly desirable neighborhoods like Yanahuara and Cayma, known for their spacious homes, green areas, parks, modern infrastructure, and often stunning views of the volcanoes (Misti, Chachani, Pichu Pichu), typically see lower DOM for well-priced properties due to consistent demand from affluent locals and expats. More peripheral or developing areas like Cerro Colorado (newer developments) or Hunter might experience higher DOM due to less established infrastructure, distance from the city center, or speculative pricing.

Practical Investment Strategies Based on DOM

For Buyers:

High DOM: Approach with a critical eye, but see it as a potential opportunity for a favorable deal. Leverage detailed inspections and legal due diligence to mitigate risks and negotiate aggressively.
Low DOM: Be prepared to act swiftly and decisively. Have your finances in order. Crucially, ensure your offer includes strong contingencies to protect your investment during the post-offer due diligence phase.

For Sellers:

High DOM: Be proactive. Review your pricing, property presentation, and marketing strategy. Be prepared to adjust. The cost of holding a property (taxes, maintenance) can quickly erode potential gains.
Low DOM: Capitalize on market demand. Ensure all your legal documentation is impeccable to facilitate a smooth, quick closing. Leverage multiple offers to maximize your sale price and terms.

Verifiable Details & Examples

Currency Conversion: While prices are often quoted in Peruvian Soles (PEN), properties catering to foreign investors frequently list prices in U.S. Dollars (USD) as a common reference currency. Always confirm the actual currency of the transaction in the offer and final contract.
Typical Transaction Costs:
- Buyers incur an Alcabala tax (transfer tax) of 3% of the sale price (minus 10 UIT, or approximately PEN 49,500 in 2024, subject to annual adjustment by the government).
- Notary fees typically range from 0.5% to 1% of the sale price, depending on the notary and complexity.
- Legal fees for title study and transaction assistance usually range from 1% to 2% of the sale price, depending on complexity and the attorney.
- Sellers pay a capital gains tax (currently approx. 5% on the declared profit from the sale, if applicable, for individuals who are not regular real estate traders) and municipal taxes.
Reliable Neighborhoods: As mentioned, Yanahuara and Cayma are consistently strong performers with relatively lower DOM for quality properties. Other attractive areas include Vallecito (central, older, charming), Sachaca (more suburban, green), and José Luis Bustamante y Rivero (diverse, good infrastructure), though DOM may vary more widely based on specific micro-locations and property types.

Conclusion

The "Days on Market" statistic, when properly understood within Arequipa's unique real estate framework, is a powerful indicator for both buyers and sellers. It is not just a number, but a window into market sentiment, pricing strategy, and potential property issues. For foreign investors, success hinges on moving beyond simple metrics and engaging deeply with local legal processes and expert advice. By doing so, you can transform perceived challenges into strategic advantages in your Arequipa real estate endeavors.

⚠️ Legal Notice: Consult a Local Lawyer. This article provides general information and does not constitute legal advice. Peruvian real estate law is complex and constantly evolving. It is imperative that all buyers and sellers engage a qualified, independent Peruvian real estate attorney and a licensed broker to conduct comprehensive due diligence and guide them through the entire transaction process in Arequipa.

Ready to navigate the Arequipa real estate market with expert guidance? Visit ArequipaRealEstate.com for personalized assistance and a comprehensive listing of properties.