While being “average” is nothing to brag about, it does have its place in the world of real estate. It shows us the big picture and helps us understand where we stand in terms of the potential value of our homes.
Market statistics help us establish broad market trends. These figures convey the lay of the land, and help homeowners compare the overall market at-a-glance in any given province, region or city.
But, these sweeping generalizations often lose relevance the moment you try relating them to the largest single asset you will likely ever own: your home.
Many homeowners would like to know how well their properties are holding their value these days, while others, lured by historically low interest rates, are thinking about getting into the market for the first time.
In either case, the average prices of a given city or region – the ones we see so widely reported because they intrigue the widest range of people – likely have little bearing on your own situation in your own neighbourhood.
Think “Comparable” or “Typical”
A more useful measure of your home’s value is the selling price of homes that are similar to yours and located nearby – in other words, “typical” or “comparable” homes in your neighbourhood.
Any given neighbourhood will consist of houses of different ages, sizes and types, with varying proximity to parks, schools, transit, shopping and other amenities. That means the typical home in your neighbourhood will be different from prices of typical homes in other neighbourhoods – and also different from the average price of all homes in your town/city.
That said, it is difficult for homeowners to do their own surveys because only listing prices – not selling prices – are available to the general public on the local MLS. The best course is to ask your real estate professional or team to show you statistics of selling prices of homes in your neighbourhood that are similar to your home.
As always, if you have any questions about pricing your home accordingly, answers are just a phone call or e-mail away!