What is the difference between Average Price (AP) and Median Price (MP)? I’m ask that quite often and the use of these terms can be confusing.
AVERAGE PRICE: Many Las Vegas Realtors – me included, use the dollar total of – let’s say 6 comparable homes, and then divide that total dollar amount by 6 to get an average price. We can then estimate a pretty accurate listing price range for our client who wants to sell a house. This can include Las Vegas homes that are presently listed on the market (average listing price), or homes that have recently sold (average sales price). It’s the mathematical result of adding the total price of the comparable houses divided by the number of comparable houses. The figure is most useful if used for the exact floor plan in the same subdivision or a very defined area within a very defined time period. Otherwise, the use of “Average Sales Price” to describe a general market, for instance the entire United States ASP, may be interpreted and influenced in many ways on timing, and can vary and fluctuate making it quite inaccurate relative to a specific area. But you get the idea….
MEDIAN PRICE: A statistic that is described as a “measure of central tendency”. It is a half point in a list of homes between the highest and the lowest – so it can move up or down depending on conditions. It is not the average or mean value. It can represent many underlying values in a data set. It is the most common measure of central tendency used in real estate practice – for large areas like a city, zip code and specific areas.
The median price of Las Vegas homes at the end of January, 2010, for instance, is variably listed as around $135,000, is soft and is continuing to drop – slowly. However, the overall average sales price of homes over the entire Las Vegas Valley, the same single family homes, has stabilized and is even increasing marginally presently. This will, or can influence the median price range eventually. They simply show two different methods of measurement.
Hope this helps you. Visit my website at http://www.lasvegasrealestate-homes.com to find available homes in Las Vegas, Las Vegas foreclosures and bank-owned properties and a lot of interesting information about the Las Vegas Valley
Sharon Durdel, ABR, CRS, GRI, SRES
Broker-Salesperson
Search for Homes in Las Vegas
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