What is the difference between median price and average price

When our list has an even number of properties, our list will not have a single middle value, but rather we find 2 values that occupy the middle space.

In this case, we simply take the average add both numbers and divide by 2 to get the median value for the entire list. Median values show a more accurate view of the market since they are typically less affected by large deviations in the data. The first thing you might notice is that one of these things is not like the others. Property 4 is priced much higher than the rest. Comparing it to the average, the median value is a much more realistic interpretation of this market.

Average Sales Price Example: 29 homes sold in a Lincolnville Maine last year, the average home price would be calculated by adding the sale prices for all 29 homes and dividing that figure by The problem with the average sale price is that if one or more properties were sold at a very high or very low price, the average becomes skewed by that higher or lower home price.

The median sale price, on the other hand, is the sale price in the middle of the data set when you arrange all the sale prices from low to high. The median sale price, then, represents the figure at which half of the properties in the area sell at a higher price and other half at a lower price.

When you list the current listing prices in your area or the sale prices for sold properties, you can easily determine if there is an outlier that could be inflating the average price calculation.

For more advice on how to make the most money from selling or buying a home, contact a Dwelling in Maine Real Estate Agent. A house that sells for far more or far less than most houses in the area will skew an average price. Looking at median prices helps a buyer make an educated decision on where and when to buy a house. Looking at median prices can alert a buyer to properties that are overpriced for the local market. Have you decided on a home to buy? Check out Bankrate. A flipped house may need more work than it seems.

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