Avid readers of this column should remember my mantra that “location location location” should be practiced by the real estate professional first before he preaches it to the client.

The Case Schiller index, NAR, CREA and many other sources give us a total summary of housing prices, units sold, average and median prices. But ask yourself what impact influences your decision to buy a condo in Vancouver? What is the relevance of the median priced bungalow ($177,000) in Winnipeg to the average price of a townhouse ($621,246) in Whistler, B.C.?

I think we can all agree that unless you are a student of economics on a national scale or you have a client who wants to relocate to Winnipeg, from Willowdale, Ont., home pricing data on the larger scale has limited relevancy.

The Greater Toronto area encompasses 85 different MLS areas, where average prices ranged from as little as $217,814 all the way to $1,324,384 in the last 12 months. There were 170 different cities, towns, and hamlets. Average prices in these went from a high of $1.395 million to a low of $45,000.

Drill down a bit more and you can find 460 Forward Sorting Areas. (An FSA is the first three digits of your postal code like M5M) with average prices ranging from $3.65 million to as little as $25,000.

Readers in the greater Edmonton region may know that there are 967 communities to offer buyers and sellers. My readers in Calgary have 346 communities, with 26 styles and 18 different subtypes of homes.

Real estate is arguably the most populated profession there is. I wonder if there are 23,231 practicing waiters in the Greater Toronto Area. To make your mark you need to stand out from the crowd. The way to do that is by showing your clients that you have the knowledge few others have.

The following randomly chosen examples in Chart 1 and Chart 2 show just a few ways of transforming incoherent, large jurisdictions into meaningful, price responsive, and understandable performance measures. These more precise measures will allow much more comprehensive price comparison, because the homes you are comparing will probably have greater similarity and therefore will indicate truer current pricing information.

Chart 1



Chart 2

After you have picked an area as your criteria, you can further segregate the performance of a particular type or style of home within your performance area (Chart 3).

Chart 3

Only when “location location location” becomes specific and meaningful will it contribute to your expertise. Clients quickly see that you are the most informed professional they’ve met so far. It follows that when you have the facts, you get the clients, and then you get the sales.

You need not have an encyclopedic mind or be a real estate nerd.

By focusing down, to a realistic neighbourhood, or smaller jurisdiction, you can see what the true value of a home in that neighbourhood is worth. And your pricing theories then become a justification rather than an aberration.