status of west vancouver apartment prices?

(March 26, 2017 , posted in West Vancouver Strata)

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 problem with averages
Before the original HPI was introduced in 1996, REALTORS® and the public relied on monthly average pricing statistics to understand trends in housing prices.

Averages, however, can be very misleading since the quantity and quality of the properties sold in any given area change over time for any number of reasons. As a result, average prices can fluctuate dramatically, making the housing market appear unstable.

To demonstrate this point, take a look at the graph below:

(Source of Text & Graph: Real Estate Board of Greater Vancouver)

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