What Housing Headlines Leave Out
The Home Guide · 03
What housing headlines leave out
An average price can change even when similar homes sell for the same price. Here is why.
About 4 minutes to read
AN AVERAGE CAN MOVE
Made-up numbers to show how averages work.
You might see a headline that says, "Home prices fell." That can be true for the homes that sold that month. But it may not tell you what happened to homes like yours.
A simple example
How prices can "fall" when no home gets cheaper
Picture a small town with two kinds of homes. Small homes sell for $600,000. Large homes sell for $1 million. In our example, those prices stay the same both months.
Month A
Month B
This is a made-up example. It shows how an average can change when different kinds of homes sell.
A better way to read housing news
Ask these three questions
Which area?
Is it about all of Canada, your city or your street? Local areas can move in different ways.
Which homes?
Is the number for condos, townhomes, houses or all of them mixed together?
Which dates?
Does the story compare last month with this month, or last year with this year?
One number to know
What is a "typical home" price?
Canada has a tool called the MLS® Home Price Index. It looks at the price of a typical home for an area and type of home. That helps show price changes without mixing as many different kinds of homes together.
It is still a guide, not a price tag for any one home. The size, shape, care and street of a home can matter a lot.
Want to check the source?
The Canadian Real Estate Association explains average prices and the MLS® Home Price Index.
Put it to use
What this means for you
Look closer to home
A national number does not tell you what your home is worth. Look at similar homes near yours that sold recently.
Compare like with like
Check the same kind of home in the area you want. A city-wide average may hide big gaps.
Use more than one headline
Look at recent sales, homes still for sale and how long they took to sell. One news story is only part of the picture.
Quick questions
Does a lower average mean my home lost value?
Not always. The mix of homes that sold may have changed. To learn more, compare similar homes in your area.
Is a national housing story wrong?
It may be right for the whole country. It may still tell you little about one street or one kind of home.
What should I check first?
Start with the area, the type of home and the dates used in the story.
Sources and further reading
Canadian Real Estate Association: MLS® Home Price Index
Examples are for learning only, not a report of actual home sales or a price estimate.
