Average Selling Price vs. Valuations... is there a difference.
Average selling price vs valuations of home values in Edmonton.
Where you ever curious about knowing the value of your Edmonton home? When you ask about the value of your home one of the things we look at is average selling price. But we at FindMyhouse.ca we also make sure you understand how the valuation of your home might have changed.
Average selling price vs. valuations is there a difference here in the Edmonton Real Estate market? Hi my name is Serge Bourgoin of eXp Realty and findmyhouse.ca and I am your Edmonton realtor!
The media and most real estate boards typically release the average selling price of the real estate in their market, I know that is what they do here in Edmonton, and I am sure the same in your area. So, is there a difference between average selling price vs. valuation?
Yes… and it can be huge, and the average selling price can be very misleading. Well let’s take a look at average selling price first. What is average selling price. Well, it is the average of all the sales that have taken place in a set period of time. Really it is the reflection of how much the average buyer is willing or able to buy. I know that here in Edmonton the average real estate buyer goes and gets a mortgage pre-approval before they start searching for a new home.
What will determine how much they qualify to purchase is primarily what is their credit score, home much debt load they are carrying, their income, and what the current interest rates are. So, when I see average selling price vary, I am looking at how much salaries of the average consumer in the market are, and the current mortgage rate are. So, if I see average selling price drop, and I know that the average selling prices is dropping because we probably saw mortgage rates rise about 90 – 120 days prior, reducing the purchasing power of that buyer. Why the 90-day lag time… Well here in our area when buyers go for the pre-approval, they get a 90-day rate hold on average. Therefore, an increase in mortgage rates will affect the market for buyers who buy 30 – 90 days later.
If we see the average selling price increase, I am more likely to see that either income of the average consumer has gone up or mortgage rates have come down. Valuation is different. Valuation is a measure of how much home you get for the dollar spent. So, it would be possible like we saw in the past when the average selling price only dropped by 2 – 3% but valuation dropped by closer to 10%. It really just meant that the average buyer was getting more home for their dollar. Well, I hope that this clears up any confusion for you.
If you are thinking about buying or selling a home in the Edmonton marketplace just visit us at https://www.Edmonton-Real-Estate.com or call me your Edmonton Realtor Serge Bourgoin