![]() Teranet only tracks single family prices and is based on land title transfers which always lag the market by a couple months: both deficits that the MLS HPI promises to address. It’s also true that a repeat sales index is a tried and true approach, with the long running Case Shiller index being the gold standard for US real estate, and the well established Teranet Index in Canada. It’s true that medians and averages are very volatile and affected by sales mix. Is that true? Well in general the idea is good. A black box that CREA claims is “the most advanced and accurate tool to gauge a neighbourhood’s home price levels and trends”. It’s all very interesting, and complicated enough to effectively be a black box for any outsider. They’ve got 365 pages detailing the typical home of every type in every neighbourhood. In Gonzales it’s a 2300 sqft house on the waterfront. In Esquimalt that house is a bit smaller and older and sits on a smaller lot. ![]() They define a typical home based on what is common in the area, then use the sales of other homes (adjusted for their various qualities) to update the value of this benchmark.įor example, the benchmark single family home in the region right now is a 3 bed 2.5 bath 1600 sqft house on an 8000sqft lot with a garage, a basement, and baseboard heating, built in 1982. They “can change a lot from one month to the next and paint an inaccurate or even unhelpful picture of price values and trends.” In place of those simple but volatile measures of prices, they have the MLS Home Price Index, which is basically a fancy repeat sales index (edit: a mathematician told me its actually a hedonic model) based around a typical or “benchmark” home. If you ask the Canadian Real Estate Association, average and median prices are trash. ![]()
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