Hedonic Pricing Index

A hedonic pricing index isolates pure price changes by statistically controlling for property characteristics, providing more accurate market trend measurement than simple average prices.


Controlled CharacteristicAdjustment
Size (square footage)Normalize to price per square foot
Location qualityControl for neighborhood tier
Age and conditionAdjust for depreciation
AmenitiesAccount for pool, gym, parking
View and floor levelPremium or discount factors
Index vs Average PriceAdvantage
Average priceDistorted by mix of properties sold
Hedonic indexIsolates true price appreciation
Example scenarioAverage price down due to more small units
Hedonic shows realityPrices actually increased per square foot

Related Terms

Price Per Square FootFair Market ValueFair Market Value (FMV)Price IndexMarket ValuationComparable Sales (Comps)Real Estate Index

RERA licensed advisors

Banner Image

Free expert advice

Get property recommendations matched to your goals. No pressure. No commitment.