Today the Calgary Real Estate Board announced the launch of the Home Price Index.  According to CREB, the Home Price Index enables Realtors to provide their clients with 'purer data that you can use for property comparisons, understanding future price trends and estimating current market values'.  Essentially, this tool will allow us to look at a typical, or 'benchmark' home in a given community and track how its value has fluctuated over time.  We can then take this information and apply it to your home or a home that you are thinking of purchasing within the same community, adjust for physical differences, and arrive at a estimated valuation.  This is a great tool to assist us in providing our clients with higher quality service and more precise estimations of home value.

A short video explanation can be found here:
http://homepriceindex.ca/coming_soon_en.html

CREB explains how it works this way:

The MLS® HPI is calculated using a sophisticated statistical model that estimates home prices based on their quantitative and qualitative features, including:
Number of rooms above the basement level
Number of bathrooms and half-bathrooms
Square footage for main living and basement areas
Whether it has a fireplace and/or finished basement
Lot size
The age of the property
Parking
How the home is heated
Foundation, flooring, siding and roofing types
Whether the property has a waterfront or panoramic view
Whether the property has been sold previously
Proximity to shopping, schools, hospitals, police stations, churches, sports centres, golf courses, parks, and transportation (including train stations, airports etc.)

Upon valuating these features or attributes, the index and the benchmark price are formulated.

MLS® HPI Benchmark
A ‘benchmark home’ is one that shows a set of attributes typical to the area/sub-market where it is located. Since ‘typical’ homes are different from one area to the next, their descriptions differ between areas. The typical home for each community will remain constant over time, indicating that attributes will not change.

The MLS® HPI benchmark price is calculated by taking the values determined by the model and applying them to these attributes for the ‘typical’ homes in each area. The value of these attributes is generated based on geographical groupings where the sales that have occurred are similar to each other, i.e. "homogeneous".