This is from the playguide:
Stages of Decay
Once a house is eligible to decay (after meeting the appropriate criteria--see above sections), it doesn't collapse all at once, but instead, goes through a series of decay stages.
Housing State Approximate Duration
Like New 1 hour
Slightly Worn 1-2 days
Somewhat Worn 1-2 days
Fairly Worn 1-2 days
Greatly Worn 1-2 days
In Danger of Collapsing 12-24 hours
When a house collapses, new houses cannot be placed on that lot for a random amount of time.