{"id":1041,"date":"2023-10-08T08:00:19","date_gmt":"2023-10-08T12:00:19","guid":{"rendered":"https:\/\/www.juliafreeman.ca\/blog\/?p=1041"},"modified":"2023-05-31T13:44:07","modified_gmt":"2023-05-31T17:44:07","slug":"economists-agree-benchmark-prices-are-the-most-accurate","status":"publish","type":"post","link":"https:\/\/www.juliafreeman.ca\/blog\/2023\/10\/economists-agree-benchmark-prices-are-the-most-accurate\/","title":{"rendered":"Economists agree benchmark prices are the most accurate"},"content":{"rendered":"
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What makes the HPI a better measure?<\/h4>\n<\/div>\n<\/div>\n
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The MLS\u00ae HPI tracks changes of “typical” homes and excludes the extreme high-end and low-end properties.<\/p>\n

“The key advantage is the MLS HPI\u00ae isn’t skewed by a changing mix of properties sold in a given month,” says Robyn Adamache, principal, market analysis, Canada Mortgage and Housing Corporation.<\/p>\n

“We may get a month like August where the average price takes a huge drop because high-priced home sales have stalled. But this may be a one-time event, just a blip in the data,” says Adamache.<\/p>\n

“When it comes to monitoring the market and measuring trends, MLS\u00ae HPI benchmark prices are a far better measure.”<\/p>\n

The MLS\u00ae HPI is conceptually similar to the Consumer Price Index (CPI), which tracks inflation by measuring the value of a \u201cbasket\u201d of commonly purchased goods and services.<\/p>\n

The MLS\u00ae HPI uses a sophisticated statistical model to estimates home prices based on their \u201cbasket\u201d of housing features. Those attributes remain constant over time, making the MLS\u00ae HPI the best tool for \u201capples-to-apples\u201d historical comparisons.<\/p>\n

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Why use benchmark prices over averages or medians?<\/h4>\n<\/div>\n<\/div>\n
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Average price are calculated by adding the dollar value of all sales in an area and dividing this number by the number of homes sold.<\/p>\n

Average prices are easy to compile and understand.<\/p>\n

“The downside is the average price is often volatile due to the changing mix of homes sold in a given month or time period,” says Helmut Pastrick, Central 1 Credit Union chief economist.<\/p>\n

“For example in August 2016, the average price for detached homes plunged because of fewer luxury home sales due to the foreign buyers tax.”<\/p>\n

Median prices are calculated by listing all sales in an area from the lowest price to the highest price, and choosing the midpoint.<\/p>\n

Like the average price, the median price is easy to compile and understand.<\/p>\n

“The downside is the median price is also skewed by the changing mix of homes sold,” says Pastrick.<\/p>\n<\/div>\n

 <\/p>\n

Credit: REBGV<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

What makes the HPI a better measure? The MLS\u00ae HPI tracks changes of “typical” homes and excludes the extreme high-end and low-end properties. “The key advantage is the MLS HPI\u00ae … [read more<\/a>]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.juliafreeman.ca\/blog\/wp-json\/wp\/v2\/posts\/1041"}],"collection":[{"href":"https:\/\/www.juliafreeman.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.juliafreeman.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.juliafreeman.ca\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.juliafreeman.ca\/blog\/wp-json\/wp\/v2\/comments?post=1041"}],"version-history":[{"count":1,"href":"https:\/\/www.juliafreeman.ca\/blog\/wp-json\/wp\/v2\/posts\/1041\/revisions"}],"predecessor-version":[{"id":1042,"href":"https:\/\/www.juliafreeman.ca\/blog\/wp-json\/wp\/v2\/posts\/1041\/revisions\/1042"}],"wp:attachment":[{"href":"https:\/\/www.juliafreeman.ca\/blog\/wp-json\/wp\/v2\/media?parent=1041"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.juliafreeman.ca\/blog\/wp-json\/wp\/v2\/categories?post=1041"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.juliafreeman.ca\/blog\/wp-json\/wp\/v2\/tags?post=1041"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}