Average and median are both measures of central tendency, but the average can be skewed by very large or very small observations. If that sounds too statisticky, blame all the statistics classes I took in college. Here in Orlando the Orlando Regional Realtor Association reports the local market statistics for its members each month. The Florida Realtors and National Association of Realtors do the same for the overall markets, but also for our local market. Locally, we tend to focus more on the median statistics, because the median is not effected as much by those very large or very small sales. The median is basically the point in the middle of all the properties. Literally, half the properties are less than the median price and half are greater than the median. Most of the time, the number I focus on is the median sales price, but list prices are also reported.
This brings me to the point of this brief post today. When list prices are reported, for some reason the average seems to be more popular than the median. I think it is because it is so much higher, and it makes the point that many homes are still overpriced. It is probably not a huge deal in the grand scheme of things, but we have a home here in Orlando that has been billed as the largest home in America under one roof. It is currently on the market for $100,000,000. That is $100 million, in case you have trouble with all the zeros like me. I ran the numbers and with the $100 million house the average list price in Orlando is $327,526 and the median list price is $168,808. When you take the $100 million house out, the average list price drops over $10,000 to $317,273 while the median price drops only $8 to $168,800. These are the things that keep me up at night.
David Welch Real Estate Optimist, Orlando Real Estate, Any Home-Any Phone
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