How to use the Home Price Index

What is the CREA Home Price Index (HPI)?

The Home Price Index is the most advanced and accurate tool to gauge a neighbourhood’s home price levels and trends.  Average home prices can change frequently, and don’t always tell the complete story. They do not consider features in the home that may impact pricing – examples include:

  • Number of rooms above the basement level

  • Number of bathrooms & half-bathrooms

  • Square footage for main living & basement areas

  • Whether it has a fireplace and/or finished basement

  • Lot size

  • The age of the property

  • Parking

  • How the home is heated

  • Foundation, flooring, siding & roofing types

  • Whether the property has waterfront or panoramic view

  • Whether the property has been sold previously (newly constructed and previously unsold, or repeat sale)

  • Proximity to shopping, schools, hospitals, police stations, churches, sports centres, golf courses, parks, and transportation (including the train station, railways, and airports)

This is where the HPI comes in. Using more than 15 years of data and sophisticated statistical models, a “typical” or “Benchmark” home is defined each month based on the features of homes that have been bought and sold. Homes are tracked across neighbourhoods and different types of homes to ensure the most accurate information. 

What is a Benchmark Home?

A “Benchmark home” is one whose attributes are typical of homes traded in the area where it is located, one being generated for each supported sub-area. Benchmark property descriptions are based on median values for quantitative property attributes (e.g. above ground living area in square feet), and the most commonly occurring value (i.e. modal value) for qualitative attributes (e.g. basement is not finished).

How can I use the Home Price Index to help determine a list price for my home?

Having a look at the Home Price Index for your local area can be helpful when determining a list price for selling your home. When used in combination with the other factors discussed in the How to price your home and sell yourself for the maximum value Webinar, you’ll have all the tools you need to confidently price your own home.

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