78 — Friday, March 19, 1999 — North Shore News For geod measure try housing price index Trent Appeibe Contributing Writer IN my last article I explained that the year- over-year change in the average selling price of homes is not a good measure of the change in the price of housing, for two reasons. Changes in average selling prices reflect not only price changes, but also changes in consumer buying, patterns — such as modest priced homes outselling luxury homes. And average selling prices jump around so much that simply comparing one month to the same month in an earlier year doesn’t tell us very much. So what can we do to get a measure of the change in haus- ing prices? One possibility is the real estate board's MLS housing price index. It is a measure similar to Statistics Canada’s consumer price index and ic estimates the change in Prices in Vancouver area hous- ing markets. Using the MLS housing price index as a mea- sure of price changes should be an improvement over compar- ing average selling prices because it is a pure measure of price changes and is not affeer- ed by changes in the mix of housing sold. However it does tend to jump around from month to month in the same way that average prices do. For example, the index for West Vancouver WHAT WATERFRONT LIVING WAS MEANT TO BE. detached homes indicates that the five-vear change in prices for last Oct. was -6%, for Now St and for Dee. 9%, “Taken together these monthly figures don’t seem toa make much sense. but the average price change of about 3% may be a meaninglil estimate of how much prices have changed berveen the fal of 1993 and the fall of 1998, To test this we need a way of measuring how much prices have changed in North and West Vancouver over the past five years, so [ searched the lists of homes that sold in 1993 and in 1998 to find specific homes that had sold ins both these years. With a iarge enough sample of homes, each of which had sold in 1993 and then again in 1998, the average price change should provide a good estimate of the change in home prices over that period. The table beiow shows the price changes trom: the fall of 1993 to the fall of 1998, caleu- lated by averaging the index fiaures tor Oct., Nov. and Dee. It also shows the results of the study comparing, the average price change of the homes that sold in 1993 and again in 1998 for cach category. Considering that these are nwo completely different meth- ods for measuring something difficult to get a handle on, its remarkable how similar the results are. Hr gives us conti- denee thar the three month average of the AILS price index, which smoothes out the month-to-month random vari- ation, provides a good measure of price changes. Cheek out monthly updates of this measure on my Web site at . Trent Appelle is an rcono- mist and reed estate agent with Sutton Group - West Coast Reale. He can be reaclied at 838-7822 or e-mail . Price changes between 1993 and 1998 Arca Property Type Detached* Artached Apartment Detached* Apartment North Van West Van Price Index Avg. Oct-Dee MLS Study of Homes Sold’'93 &°98 The 8% 8% 9o% -3% -5% 3% 2% 11% nfatt “Any hones that had a siqnificant increase in square footage berween 1993 and 1998 were excluded fram the study. ** There were anly six apartments in this sample which was too few to give meaningful numbers. The other cateqorics all had between 20 and 30 homes in their sample. If you calied your Realtor because of their advertisement in the North Shore News please tell them... “I saw your advertisement _ inthe. BALCONY, ORCHESTRA OR DRESS CIRCLE? If you have your hearc set on a waterfront home at Bayshore, the time has come to choose it's exact location. Because, as con- struction moves toward completion, the pace of sales is expected to increase. Already, .people are showing particular interest in our marina-view suites. With their sweeping panoramas and proximity to the water, we think of them as ‘our dress circle. But you just might think of them as home. Ol OIF - BAYSHORE DRIVE Most suites priced from $500,000 to $5 million. Presentation Centre, Suite 1550 - 1500 West Georgia. Open 12-5 pm Monday - Saturday. For a private appointment call Evelyn Froese (604) 688-1710. Exclusively marketed by Royal LePage, Developed by Bayshore Gardens Developments Cre,