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Average Vs Median
Happy Monday everyone!
So this is something I just recently learned.
When we talk about home values, we use two terms-the average price of a house, and the median price of a house.
I think everyone is ok figuring out the average price of a house in a given area.
Let's say you have 15 homes that sold in a particular market. Here are their prices: $151,850, $130,700, $147,500, $122,100, $134,650, $124,800, $110,500, $162,900, $159,000, $148,990, $465,600, $123,700, $99,900, $167,900 and $79,900. The AVERAGE price would be $155,333 (total amount divided by 15).
On the other hand, to find the MEDIAN price of these houses, sort the above properties from lowest to highest: $79,900, $99,900, $110,500, $122,100, $123,700, $124,800, $130,700, $134,650, $147,500, $148,990, $151,850, $159,000, $162,900, $167,900 and $465,600. The midpoint of the sequenced properties is the MEDIAN home price-in this example it would be $134,650.
As you can see, the AVERAGE price is over $20,000 higher than the median price. The MEDIAN price is the price the middle class is built on and measures affordability. The MEDIAN price also eliminates the noise of high and low properties and concentrates value.
Remember this the next time your in the market looking at houses with me... :)
My name is Olga Telesin and I am a Colorado Realtor helping buyers and sellers around the Denver Metro areas of Colorado, including Denver, Aurora, Parker, Centennial, Highlands Ranch, Castle Rock and....
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