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While some metrics in our MarketStats products are fairly straightforward – New Listings, Closed Sales, Inventory, etc. – others sometimes raise questions.

Two we hear frequently are:

  1. How is Median Sales Price calculated?
  2. What is the difference between Median Sales Price and Average Sales Price?

As it relates to residential real estate, the average – or mean – sales price is calculated by adding all home prices, then dividing that by the number closed sales.

The median sales price lists all prices in ascending or descending order and finds the midpoint – where half the homes sold for more, and half the homes sold for less.

Let’s break it down even more. Something like this would not necessarily be uncommon in a given geographic market segment:

$100,000     (foreclosure)
$150,000     (short sale)
$175,000     (traditional sale)
$200,000     (traditional sale)
$225,000     (traditional sale)
$250,000     (traditional sale)
$6,000,000 (estate)

Average:     $1,014,286
Median:      $200,000

Many times, one would think an average would give a more accurate representation of the data. However, as you can see from above, the median is the better option.

Do you have the market statistics you need at your fingertips?

If you’re a real estate professional and belong to an MLS that subscribes* to MarketStats by ShowingTime, you already have access to useful reports and charts for every situation.

For MLS and association staff who need to quickly generate reports and charts that summarize local market activity, MarketStats by ShowingTime can help. Contact us for more information.

*MLSs and associations subscribe to MarketStats by ShowingTime to provide ready-made statistical tools for members. MarketStats is currently sold only to MLSs or associations.