Were you the kind of kid whose eyes glazed over in math class? Has it been a long while since your school days? Or are you just plain confused? No matter which category you fall into, we can clear up your confusion. So, read on as we explain the basics of the average sales price and the median sales price.
Some quick context
If you’ve read any of our social posts or our blogs on real estate statistics, you’ve heard us talk about average sales prices and median sales prices. Though the numbers often look like they fall into similar ranges, these are two very different terms.
However, both do have something in common: they’re ways of clarifying home market values in specific areas during a distinct range of time. Now, let’s get into the math!
The median sales price
Before you can start comparing the average sales price and median sales price, though, you need to know what they mean. We’ll start with the easiest to determine.
Finding the median doesn’t require a single calculation. All you have to do is line up the numbers in numerical order and find the one in the middle.
Need a visualization? It’s easy as one, two, three—literally. If we were finding the median of those numbers, it would go like this:
The average sales price
You’ll have to get your calculators out for this one! The average sales price is the number you reach when you add all the figures—like home prices—together and divide them by the number of items added in the sum.
Here’s another example, using the numbers one, two, three, four, and five:
Which number should I use?
Both the average sales price and the median sales price give a good idea of home market values. When viewed together, they can give you a fairly accurate range as well.
However, if pressed, you may want to trust the median more. That’s because outliers cannot dramatically shift its value, either upwards or downwards, as they do for average sales prices. Luckily, though, you don’t have to pick! Both figures will appear on real estate statistics reports.
I’m still confused—who can I talk to?
Your Realtor has the experience and skills you need to understand real estate concepts big and small. If you have any questions about the market, Ryan Roberts can help.
He will guide you through the process every step of the way! Ask him any question, no matter how basic it may seem.
Summary
We finished comparing the average sales price and median sales price—and we only had to do a tiny bit of math. Not bad at all! If you ever want to learn more about the local real estate market, contact Ryan Roberts here. You can also read about all the facts and figures when you browse our blog.
