What’s a certified and well-tested digital home valuation tool? MLS® Home Price Index Tableau Dashboard

The most sophisticated and precise instrument for determining home price levels and trends is the MLS® Home Price Index (HPI). It is made up of a collection of software tools that are set up to offer time-related indexes on the Canadian residential markets of participating real estate boards.

According to Chris Jokel, Senior Data Engineer at the Canadian Real Estate Association (CREA), “It’s a tool that tracks the changes in home prices over time. It’s a sophisticated, extremely precise method of assessing prices and trends in particular regions—a method that is far more significant than an average or median, which can be distorted by abnormally high or low prices or low sales volumes.” 

The majority of Canadian housing markets are covered by the monthly MLS® HPI, which is only accessible to REALTORS®. It examines both qualitative and quantitative aspects, such as whether the house has undergone renovations or has a finished basement, as well as square footage and the number of bedrooms. The value that purchasers place on those traits based on sales prices is the foundation of the MLS® HPI, and these values are subject to change over time. For instance, during the pandemic, indoor living spaces and home workplaces saw a sharp increase in value. 

The Canadian Home Price Index’s features are as follows:

The HPI makes use of a benchmark property, which is an example of a typical property with a set of particular characteristics (e.g., size, location, and features). To gauge price variations, the price of this benchmark property is monitored over time.

​Geographic Coverage: Major cities and provinces as well as other markets and locations across Canada are covered by the HPI. It offers a summary of price patterns for various property kinds in various locations.

​Seasonal Adjustment: The HPI is seasonally adjusted to take into consideration seasonal fluctuations in the housing market (such as higher prices in the spring and summer), which makes it possible to compare prices over time with more accuracy.

Comparison to a Base Period: Usually, the HPI is computed in relation to a base period that is established at a particular moment in time. The index’s changes are then reported as a percentage of the base period.

​Weighted Index: Properties that are more like the benchmark property are given more weight in the HPI, whereas properties that differ significantly are given less weight.

​Data Sources: To track real estate transactions and compile information about property attributes, the HPI uses data from multiple listing services (MLS) and local real estate boards.

Do you want to see this tool in action? You can try a sample of the tool here