Home Price Index; (HPI) FAQ MENU
In the Pursuit of Accuracy
Sept 2013; Great news we now have released our MOST accurate HPI the Paired Home Price Indexes HPIp for 17 cities between West Vancouver and Chilliwack. The HPIp is calculated comparing each sale to it's previous purchase price after 2005 thus determining the exact price changes for the exact same home for those time periods. These Apple to Apple paired sales data is now reflected into the average market price change for those cities as HPIp.
Split Market area into top & bottom: Each of these HPIp indices now have their market place split into the Top 50% and the Lower 50%. These two markets represent very different buyer groups; for example many Multi-Millionaire or Billionaires buyers will pay cash for their high end homes and the right Ocean View or Feng Shui can make a big difference in the sale prices. Now at the same time the lower 50% purchases can represent local buyers that are subject to local consumer confidence, employment, and conventional financing rules of the day.
Watch the Movie to see the difference in the various Home Price Indices in Westside Vancouver
Notes: The HPIp prior to 2005 are combinations of several general HPI's and are less accurate.
The Average HPIp is an average of the Top 50% and Lower 50% HPIp's and are therefore less accurate.
Please use the Top or Lower Market Evaluator for most calculations
The RE/MAX Market Reports Home Price Indexes (RMR.HPI) have being replaced with the new HPIp in 80% of the Greater Vancouver market places. The RMR.HPI algorithm is based on adjusting a 25% weighting for both the Homes Size, Lot size, and a 12.5% weighting for Age. In 2012, we removed all the New and the 1 Year Old Homes from the Index because some Sales Include HST-GST, while some Rebate the HST - GST to the Builder, thus creating fluctuations of 15% Up or Down depending on how the final sale is reported.
The 2012 RMR HPI was calculated using the Middle 50% of the Sales: The Top 25% and the Bottom 25% of all Detached Sales are excluded from the RMR.HPI calculations.
DO REMEMBER: Any Home Price Index is only a relative indicator of Home Price Changes and is not an accurate determination of your own personal home price change. Please call me for an Accurate Up-to-Date Comparative Market Analysis for your Home, along with a Winning Strategy for Success.
It is our goal to replace all RMR HPI with split the Top 50% , Bottom 50% and the Paired study data HPIp over time. Each city takes about 2 weeks work so do request your city be but at the top of the list.
The Past Home Price Indexes can produce HORRIBLE Indicators of Market Changes. Currently most Real Estate Board Sales Indexes or Averages include Foreclosures, Grow-ops, and/or Homes with unique Value-Added features like views, as well as blending 2 bedroom homes with the 9 bedroom homes in the mix for calculations. Not to mention Homes with High Lot/Land Value, Homes with Lower Lot/Land Value; the right or wrong feng shui, all the while making little to no adjustments for the Actual Square Footage of the homes to determine the Average Price (HPI), thus creating incorrect fluctuations in the Index.
1. THIS SIMPLY DOES NOT WORK! For example, if the High End Market actually drops by say $100,000, and more High End Homes sell that month than Low End Homes, then this old style HPI (Average) shows that the PRICES WENT UP... INSTEAD OF DOWN???
2. Recently the Vancouver and Fraser Valley Real Estate Boards have developed an new National MLS HPI. We do publish both indexes in our Reports which are identified with these colors; MLS HPI ---- or our HPIp
3. Many Realtors use the Average or Median Home Sales Prices as a changing market indicator for their sellers and buyers. This will most often show complete opposites to the real price changes and since they usually cause confusion to Most Home Sellers Buyers and even many Realtors as they are the worst indicator of market changes. See Movie