Tuesday, May 21, 2013

DYK - What is the difference between Average Sale Price vs. Median Sale Price?

I get so into MoCo information that I sometimes forget, that this is primarily a real estate blog!  Do you know the difference between average sale price vs. median sale price? Get out your elementary mathematics text books and look up the definitions! The Average Sale Price is the sum of the total dollar volume divided by the total units sold.  The Median Sale Price is the sales price at which half of all sales are above and half of all sales are below.  It's helpful to think of it as the mid-point.  Sometimes the Median Sales Price is a better indication of the market than the Average Sales Price, especially when a few sales may distort the Average Sales Price.

Here's an example:  Ten sales are in the area.  One sold for $1,000,000 and nine sold for $250,000.  The Average Sales Price would be $325,000 and the Median Sales Price would be $250,000.

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