The MLS® HPI is an alternative measure of real estate prices that provides a clearer picture of market trends over traditional tools such as mean or median average prices.
A mean average is the average price obtained by dividing the total dollar volume of sales by the number of sales.
To get a median price, all of the sales prices are arrayed in numeric order. In the case of an even number of sales, the median is the highest price in the lower half of the group. If there is an odd number of sales, the midpoint sale is taken as the median.
The MLS® HPI concept is modelled after the Consumer Price Index, which measures the rate of price change for a basket of goods and services. A basket is the combination of goods and services that Canadians buy most such as food, clothing, transportation, etc.
Instead of measuring goods and services, the MLS® HPI measures the rate at which housing prices change over time taking into account the type of homes sold.
The MLS® HPI is designed to be a reliable, consistent, and timely way of measuring changes in home prices. It is calculated each month and covers five major housing markets (Greater Vancouver, Fraser Valley, Calgary, Greater Toronto, and Greater Montreal, with additional markets to come). The MLS® HPI is also aggregated for the collection of these markets.
Check out the HPI price, new listings and inventory trend for West Vancouver detached homes and apartments over the past five years: