What is the difference between median sales price and median sales price and why is it important?

There is a wealth of real estate data for specific areas that, if read correctly, can be very helpful. The only problem is that a person practically needs a bachelor’s degree in economics to be able to crack this data. That is why I have decided to show how to read this data in a series of articles.

In this first article, I have decided to explain the difference between median sales price and median sales price. These terms are misleading, because most people think that they are the same thing and get confused when they discover that they are not.

The median sales price is equal to the total of all prices in the entire area divided by the number of homes. This sounds complicated, but it’s actually quite simple. It is just the average of the sales prices of all the houses in the area. Here is an example to help you. There are five houses sold in an area for $500k, $430k, $470k, $700k, and $600k. The total is $2,700k, so we divide by five to get the average, $540k.

Median sales price means something quite different. The median is the middle (middle) number in a list that is ordered from least to greatest. So the median of our same example above is $500k, since $500k is the middle number in the list $430k, $470k, $500k, $600k, and $700k. If the list has an even number of houses, then the median is the average of the two middle terms. For example, let’s add one more house to the list above. Our list now is $430,000, $470,000, $500,000, $600,000, $650,000, and $700,000. The median is $550k, since $550k is the average of $500k and $600k, the two numbers in the middle.

When it comes to housing statistics, there is usually a lot more to each list and the mean and median are often very different.

Now that you understand the difference between the mean and the median, you may be wondering why these numbers are important. These numbers don’t just tell you about an area individually, but together they give you important information that many don’t know about and can help you get an edge.

When the average is greater than the median, it means that there are more houses in the area that are cheaper than the average. When the average is smaller than the median, there are more houses in the area that are more expensive than the average. The greater the difference between the average and the median, the better or worse the area for investment.

This information is essential in a number of situations. If you want to sell a home for a profit, it would be best to sell a home cheaper than average in an area where the median sales price is less than the median sales price. This would mean that your cheap house would be in a good area and you would generate more profit by improving it.

We have taken our first step in being able to read real estate data and use this data to gain an advantage over our competition. We’ve learned the difference between average sales price and median sales price, as well as how we can use this information to learn things about an area your competition doesn’t know about.