In real estate, most people focus on an average or median price of a home when it comes to statistics. However, this is not the best way to follow market trends for a city. For example, over the period of a month, if you have 1 sale that is $1m, the average price will be skewed. Same as if you have 5-10 sales of homes in a neighbourhood for under $100k. It doesn't remain consistent throughout the months or years and when viewing statistics in the city as a whole can be completely inaccurate.
The best way to follow market trends is with the HPI or Benchmark Price. I personally like the Benchmark price as the price is factored off certain properties of a home. If we look at the following chart, we can see how the average price bounces up, down, and up and down again.. However, if you look at the Benchmark Price, it remains a consistent squiggle whether it has moved up or is moved down depending on what is happening in the real estate market.
*SOURCE: Association of Regina REALTORS®*
So what is a Benchmark Home? Price? Why do I use it? In Regina, for example, the Composite Home Description is as follows below. In all of my monthly market updates you will read about the composite benchmark price. This is NOT neighbourhood specific, rather the most common property type in Regina.
As a real estate agent, we have access to tools that allow us to see the Benchmark Price for every* neighbourhood in Regina - whether it's a bungalow, 4 level split, two storey home, or a condominium. It is not something I use to base the market value of your home off of as it does not factor in location, renovations or updates, or supply and demand in a specific neighbourhood. Rather, it's the best tool to follow trends in a neighbourhood based on a style of home - especially when reviewing a city as a whole.
If you'd like to discuss the your home and neighbourhood, contact me here! I'm happy to help!
*Note: there are some neighbourhoods in Regina that do not have enough sales statistics to populate a Benchmark Price.