Abbotsford, BC

Everyone, media, home owners, Realtors etc. are fascinated with the average price of housing. With 80% of sales within a $200,000 price change it only takes a couple of million dollar properties to skew the average into an unrealistic number.

I like using the Housing Price Index (HPI) as an indication of the market for tow reasons: first, its gives a truer indication of real estate price levels of both the long and short period; second, when doing a market evaluation of a "typical" home I can look at the change in the index between the date a client purchased their house and the date of the evaluation and extrapolate a current price.

The HPI of the three housing categories follow.

The Housing Price Index (HPI), for all detached homes and apartment condos have recovered to within 3 per cent lower than in spring 2008. HPI for all three categories for January 2010 was $446,671 compared to $460,682 in May 2008.

HPI of Fraser Valley Detached Homes increased by 10.8 per cent going from $452,145 in January 2009 to $500,931 in January 2010.

HPI of Fraser Valley Townhouses increased by 7.6 percent going from $295,339 in January 2009 to $317,719 in January 2010.

HPI of Fraser Valley Apartments increased by 10.4 per cent going from $220,595 in January 2009 to $243,470 in January 2010.

The Housing Price Index (HPI) is a tool developed by the Greater Vancouver and Fraser Valley Real Estate Boards to measure residential market activity. It tracks and measures the movement of mid-range priced homes for a set time period and provides reliable information on housing price trends since it excludes extremely high and low priced properties.

The following is a statistic that many real estate experts use an indicator of market status.
That is the ratio of total sales to total listings.

Its commonly help that a ratio of 18% to 22% indicates a balanced market. Below the orange line it is a buyer's market and above theorange line it is a seller's market.

The graph tells us that although the market has significantly improved over this time last year we are on the edge of a balanced market.

When pricing your property there is one statistic that is a must to look at: The ratio of expired listings versus new listings on the market. Sure it's important to look at how much inventory you have to compete against but you need to look at the daily dynamics.

If you have less new listings coming on the market than are selling the will be a decrease in supply. When the number of new listings exceeds the current sales there will be an increase in demand.

Its supply side economics and as we know an increase in supply can depress prices and a decrease in supply can increase prices.

The last two years with rapid swings in the market saw ratios range from nine to one hundred percent.

Over the long haul the ratio is usually 40% to 60% for both factors.

You may find the following charts interesting.

I like to use the Housing Price Index (HPI) when I do a market evaluation. The average price often quoted in the news media is a misleading number. In a market where the median price is $350,000 a a couple of sales one month in the million dollar range dramatically inceases the average creates a false impression of the value in the bulk of the market.

HPI tracks and records the selling price of a "typical" house in a particular market.

You can see by the chart below that the changes in price he last four years as not as drstic as the news media champions.

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