More and more we are using the term BENCHMARK PRICING but not a lot of the general public knows what this is - and sometimes we can get lost with all of the real estate terminology out there. When talking to your agent, reading an article or looking through the various homes on the MLS® System. There are quite a few terms you may not have run into before and the three most important ones in terms of house prices that need to be explained are: median, benchmark and average prices.
If you were to take all of the sales within a given time period and put them in a list that ranged from the lowest price to the highest one, the median price would be the price value that is found right in the middle. Half of the real estate sales would be lower-priced and half would be higher.
This price is found by taking the total dollar sales volume and then dividing this number by the total amount of sales. This number can sometimes be biased if a lot of lower-priced homes or higher priced ones have been sold within this certain time period.
When the sales data and pricing is calculated in a certain area / community / city for a TYPICAL property this is called the benchmark price. Typical homes are defined by the various property attributes (e.g. above ground living area in square feet) and qualitative housing features (e.g. proximity to shopping, schools, transportation, hospitals etc.).
The Housing Price Index determines the benchmark price and it is given based on criteria that is commonly found in other properties in the same area. This could be considered a typical or prefered type of home and sale price in a given area and does not factor in lower end or higher end properties.
If you have any questions about these terms or any other ones contact me anytime It's important that you know and understand everything about a home sale or purchase before making any kind of final decisions