The actual (not seasonally adjusted) national average price for homes sold in January 2012 was $348,178, representing an increase of 1.2% from its year-ago level. This ranks among the smallest increases since late 2010.

On a seasonally adjusted basis, the national average home price rose 1.6% on a month-over-month basis, marking a rebound from a decline of similar magnitude in December. This pattern mirrors the one playing out in the newly launched MLS Home Price Index (HPI), published on February 6.

“Year-over-year comparisons in the national average price are expected to become volatile and may turn negative, reflecting average price developments in the first half of 2011 in Vancouver,” said Gregory Klump, CREA’s chief economist. “At that time, high-end home sales in Vancouver’s priciest neighbourhoods surged to all-time record levels, which skewed the national average price upward considerably. A replay of this phenomenon is not expected this year. As a result, comparisons for national average price to year-ago levels over the coming months will reflect an upwardly skewed base effect. For this reason, year-over-year comparisons should be kept in perspective. Developments in the MLS HPI will provide important guidance on price trends, since it is not affected by the problem of compositional shifts in the mix of sales activity.”

The MLS HPI also takes into account the contributions toward the price of a home made by a broad range of quantitative and qualitative housing features, allowing it to track Canadian home price trends better than any other measure.

Further information can be found at http://www.crea.ca/public/news_stats/media.htm.