What is the difference between the median home price and the average sales price???

Question

I'm trying to do some research on home prices in our area because my husband and I are in the process of looking for our first home.

I'm getting confused by all the reports that say that the median home price is $680,000 but that the average sales price is $720,000. I would be extremely grateful to anyone who can explain to me the difference between the two.

Answer 1

These are two statistical terms

Median means half of all purchases fall below that sales price, and half are above it.

Average is adding up all the sale prices and dividing them by the total number of sales.

As an example, let's say there were 5 home sales, totalling $2, $3, $4, $5, $9. The median is $4 because half the sales were below and half were above. The average is $4.60.

Answer 2

Average means the total divided by the number of items.
For example, the average of A, B, C, and D is (A+B+C+D)/4.

Median means in the middle, in other words, the one that 50% are above and 50% are below.

For example, if the prices are $680,000, $1,000,000, and $480,000, then the median is $680,000 because there are the same number (1 is this example) above $680,000 and below $680,000 and the average is one third of the sum 680000+1000000+480000, which is $720,000. There are really more than three houses; this is just an example.

Here is a real example. G.W. Bush is the 43rd President of the U.S. From 1789, when G. Washington became President, to now, there has always been one and only one President of the U.S. Some served exactly four years, some served exactly eight years, one served more than eight, and several served various other amounts of time less than eight, but the total was 218 years (2007-1789). (Of the 43, there were 24 who served either exactly eight years or exactly four years, eight who died in office, one who resigned, one who is still in office, and 9 who started as Vice President and become President when a President died or resigned.) Therefore, the average is 218 divided by 43, which is slightly over five years. To find the the median, you rank the lengths of time that Presidents in order of how long they served, and then see which number is 22nd (with 21 before and 21 after).

Answer 3

The average is total average sales price of all homes and divides it by the 3 of houses. I don't like the average because it just total the prices up and divides by the number of houses ie. 6 houses sell for 100k each and three houses sell for 400k. the average is $200k ($1,800,000/9). It is not a good description of the market because the market shows you can either get a house for 100k or 400k there are no houses for 200k. The median takes all the houses in price order and finds the middle number and reports it ie.
100k, 100k, 100k, 100k, 100k,100k, 400k, 400k, 400k.
The middle number is 100k which is closer to what most houses are selling and is a better description of the market.

Answer 4

The average is exactly that the AVERAGE, the total of the prices divided by the number of prices in this instance. The mediun would be the number in the middle. If there are 3 houses 100,000.......200,000 and 400,000 then the mediun is 200,000 while the average (mean) is 700,000 divided by 3 or 233,333.33

Answer 5

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RE :What is the difference between the median home price and the average sales price???
I'm trying to do some research on home prices in our area because my husband and I are in the process of looking for our first home.

I'm getting confused by all the reports that say that the median home price is $680,000 but that the average sales price is $720,000. I would be extremely grateful to anyone who can explain to me the difference between the two.
Follow 5 answers

Answer 6

median home is statewide usually its the average of all homes statewide

if you are looking in a town and getting the average price it is the average price in that area