Kemp Appraisal Ltd. carefully analyzes real estate statistics in order to keep on top of the most current trends in real estate.
AVERAGE SALES PRICE
Media often mis portrays the strength of the real estate market by depending on comparing average sales price. However average sales price comparisons assume that the housing stock has remained the same. That means that there has been no new housing developments and no new infill homes. Often new homes are larger in size than the existing housing stock and therefore this is increasing the average square footage of homes. It is normal that is the size of the homes are increasing than the value will be increasing based on size alone. Therefore it is very misleading to rely solely on average sales price to gauge market strength.
The average sales price of single detached homes was $302,727 in 2016 and an average increase of 3.0% in 2016 over 2015 sales prices. Many homes have not experienced a value increase in 2015 or 2016. These modest increases in average sales price are mostly due to the larger in size new home sales.
Many real estate analysis rely on a benchmark pricing instead of average sales prices. What did a certain style home (bungalow, two storey) built in a certain time frame (age of home) and in average condition sell for in a specific neighbourhood on an average sized lot for the area. The benchmark home sales must keep other attributes such as number of bathrooms, basement finishing and garages consistent from year to year. While the benchmark price in one neighbourhood could be increasing another neighbourhood may have stable or falling prices.