MLS® Home Price Index updated to reflect buying trends

If you noticed some slight changes in our historical benchmark prices recently and wondered if you were seeing things…. don’t worry, you’re not.

To reflect the most current home buying trends, the MLS® Home Price Index was recalibrated in June resulting in slight adjustments to historical benchmark prices and indices across all areas and property types going back to January 2005.  The result is a more accurate MLS® Home Price Index that better reflects the current market to help you help your clients make more informed decisions.

What’s changed?

You won’t notice any changes to the MLS® HPI in our current Stats Packages because you have no comparison. The MLS® HPI benchmark prices are simply ‘up to date’.  Where you would notice the adjustments is when you’re comparing, for example, a benchmark price from an old stats package with the same historical price as shown in the FVREB Stats Centre. (Yes, this could suggest you’re a stats geek and we think that’s great!) For example,  the May 2017 Stats Package shows the benchmark price of an Abbotsford townhome as $315,000. The Stats Centre – now updated with the new revised historical MLS® HPI Prices –  indicates it was $315,800. Some historical prices went up a little, some went down and some didn’t change at all.

The changes most matter if you have created personal graphs in excel reflecting historical benchmark prices for a given area or sub-area. You might want to re-extract your data, which is easy to do via the Share option on the Stats Centre: CSV – grab the raw data.

How do they update the MLS® HPI?

To understand how they update the Index – last recalibrated in 2015 –  it’s helpful to first be clear on what the MLS® Home Price Index is.

Developed using data from the Multiple Listing Service®, the MLS® HPI is the best and purest way of measuring changes in home prices. The Index tracks change in price trends for a specific type of house in a given neighbourhood by comparing price levels at a given point in time with price levels at a base point in time. The starting point for the current MLS® HPI was in January 2005 when the index was set at 100.  In June 2017, the index for FVREB Single Family Detached was at 250.6, meaning detached homes in our region have increased in value by almost 151% in 12 and a half years.

To ensure the accuracy of the Index, the design team reviews the model – the housing categories and markets – every few years and makes changes.  Here’s what they did for the June 2017 recalibration:

  • Sub-areas where home sales over the past three years totaled 12 or less were removed from the model and won’t produce an Index value or benchmark price. (This is why you sometimes see a message in the Stats Centre indicating, ‘MLS® HPI benchmark prices can only be produced in areas where there is sufficient sales activity’.)
  • Sub-areas that weren’t previously included due to low sales and where home sales have increased to 20 or more over the past three years were added to the model, so some sub-areas that didn’t produce an Index value or benchmark price in the past, now will and the historical MLS® HPI data has been recalculated to reflect those changes.
  • Benchmark property descriptions for each property type and sub-area have also been updated. (You can find the new descriptions in the FVREB MLS HPI Benchmark Attribute Report on REALTOR Link® > Market Data & Stats > MLS® Home Price Index.)

It’s worth noting that what hasn’t been updated are the PDFs of our historical Stats Packages stored on REALTOR Link®, so if you want accurate historical benchmark prices right down to the dollar head to the FVREB Stats Centre.

For more information on the MLS® HPI, including how it works and what it can do for your business, visit CREA’s dedicated page on REALTOR Link®.