Tremendous Gains in Home Prices Since 2016
Buyers from the greater Toronto area continue to buy in the Niagara region and it’s a real financial benefit for sellers. Over the last few years home prices have made tremendous gains. As a reflection of this phenomenon, and though these percentages may differ in diverse parts of the region, our records, drawn from MLS sales, indicate the following overall average price increases:
In 2016, the overall average price increased by about 18% compared to the year before;
In 2017 the average price increased by about 23.8% versus the previous year;
In 2018 the average increased by about 3% over the prior year.
Though not a strong metric, the 3-month year-to-date average to the end of March, 2019 indicates an overall average price increase of about 6%. This, of course, is subject to change over the following months.
The Internet’s Role
Through the internet, today’s buyers research homes for sale in any area. They can also shop different regions, cities and towns to compare prices. This ability to comparison shop has played a significant role in attracting people to Niagara. With this increased demand on a limited supply, prices have soared.
Let’s Take it One More Step...the HPI
Through the MLS® Home Price Index (HPI), we REALTORS® have the ability to track changes in home prices by comparing price levels at a point in time with price levels in a base (reference) period. The base period value is always 100.
The composite benchmark price for the Niagara Region is shown below as is the HPI. The HPI base period having a value of 100 is 2005. So the MLS® HPI composite value for homes in March 2012 is 122.1. This means the value of homes is up 22.1%, compared with the 2005 base period (122.1 − 100 = 22.1%). The chart below gives both the benchmark price and the HPI index to March 2019. The composite price is made up of the various styles of homes.
How Does the HPI Differ from Average and Median?
CREA’s “MLS® HPI is based on the value home buyers assign to various housing attributes over time. Price changes, hence, are less volatile than average and median prices, which can swing dramatically in response to changes with high-end or low-end sales volumes over time. This is a great tool.