Pricing a home

By Gord Archibald, The Leader-Post, April 7, 2014 - Regina's real estate market has caught the attention of people here and across the country over the past seven years. Everyone owning a home is interested in its value while many who don't own are interested in what it takes to purchase a home. We can all agree that housing prices have appreciated in recent years. The familiar measure of housing values for decades has been the average price. Although providing a general measure of value trends, it contains flaws that can bias accuracy. It is influenced by compositional effects such as changes in the mix of lower-or higher-valued property sales, which can result in higher or lower averages despite no change to actual values.

This is why the association introduced the MLS Home Price Index (HPI) in 2012 - a more accurate way of measuring price trends. It uses sales data to track the selling

prices of four benchmark common housing types plus a composite of all four.

January was an example of where this occurred. A shift in sales towards a larger proportion of higher-valued homes caused the average to increase to $323,200 while the HPI price was $303,500 - almost a $20,000 difference. Over the course of 2013, the HPI indicated a drop in its composite price of one per cent while the average price increased three per cent.

For those who follow local housing values the HPI should be the first place to look. The association publishes HPI data on its website at reginarealtors.com each month.

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