The House Price Index (HPI) measures the change in prices of residential properties over time, typically comparing current prices to a base period. It provides a broad overview of how property values are trending in a given area or market.
On the other hand, the median sale price is the middle value in a list of property sale prices, arranged from lowest to highest. It represents the price at which half the properties sold for more and half sold for less. Unlike the HPI, which tracks price changes over time, the median sale price gives a snapshot of the market at a specific point in time.
In essence, while the HPI provides a dynamic view of price changes over time, the median sale price offers a static view of the market at a particular moment. Both are useful metrics for understanding the housing market, but they focus on different aspects: trends over time versus a snapshot of current market conditions.
Number of sales” refers to the total count of real estate transactions that have occurred within a specific time frame, typically within a particular geographic area or market segment. This metric indicates the level of activity in the real estate market and can provide insights into market trends, demand, and overall health.
Real estate professionals, economists, and policymakers often track the number of sales to assess market dynamics and make informed decisions. Increases in the number of sales may suggest a strong demand for properties, while decreases could indicate a slowdown in activity or shifting market conditions.
The “sale to active ratio” in the real estate market is a metric used to gauge the balance between the number of properties sold and the number of active listings available for sale within a specific area or market segment.
To calculate the sale to active ratio, you divide the number of properties sold within a certain period by the number of active listings at a particular point in time, then multiply by 100 to express it as a percentage.
For example, if there were 50 properties sold in a month and there are currently 200 active listings on the market, the sale to active ratio would be:
(50 / 200) * 100 = 25%
A higher sale to active ratio typically indicates a seller’s market, where demand exceeds supply, potentially leading to rising prices and competitive bidding among buyers. Conversely, a lower ratio suggests a buyer’s market, where supply exceeds demand, giving buyers more negotiating power and potentially leading to stable or decreasing prices.