You may have seen reports in the past referencing the MLS® Home Price Index (HPI) in other parts of Canada and noticed Edmonton was not included, well, the tool is now available in Edmonton! This means will be able to include "benchmark" prices and trends with our monthly stats, giving greater insight into what is happening in the Edmonton real estate market. We can also more accurately compare our market, with other markets across the country. What exactly is the HPI? It's a way of following pricing trends that is more accurate than using averages and medians which can swing dramatically when the volume of high-end or low-end sales change over time. A "benchmark home" is set for each area (based on the most common attributes of homes traded in that area) and its value is tracked over time. For example, the benchmark single-family home in Lynnwood was a 3 bedroom, 2 bathroom, 1181 square foot detached home with a finished basement, attached double garage, 6,297 square foot lot, built in 1959, and the benchmark price in March was $378,500. Each year the benchmark homes are reset, based on sales over the previous 5 years. We can also make all sorts of comparisons, between different areas and different types of homes. Sticking with Lynnwood, in this example, you can see the benchmark price for single-family homes since 2005, compared to surrounding neighbourhoods and the city as a whole:

I've added the most recent benchmark trends to our monthly market report: check it out! For those who prefer video, here is a video from the Canadian Real Estate Association explaining the HPI:

While the HPI is not mean to estimate the value of a specific property, it does provide a more accurate idea of pricing trends for a home in a given region, city or neighbourhood. For example, your REALTOR® can get a quick glance of how the value of your home has changed since you bought it by simply entering the date you bought your home, the neighbourhood and the amount you paid for it. For example, if I bought a bungalow in Lynnwood in January 2009 for $325,000, it likely increased in value to about $377,000 in March, assuming it is in the same relative condition to benchmark homes in the area. Obviously, more work needs to be done to assess it's true value, but the HPI is another tool in our belt that we can use to assess the value of properties in the Edmonton area. The HPI is published on a monthly basis, near the beginning of each month and I look forward to including HPI information in our monthly reports on the market.     Posted by Liv Real Estate on
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