An Easy Way to Explain the Difference Between Median Price and Average Price, Sometimes the Disparity Can Be Huge. Here's a Naples, Florida Twofer For Ya!

What's the Difference between Median Price and Average Price.  Depending on what is being portrayed the use of these terms interchangeably will confuse the best of us.  Many times this is how the National media leaves the consumer with innaccurate information and in a sad and unnecessary state of FLUX!

Example:  Imagine you're about 8 or 9 years old and you and good ole' Uncle Bill want to enjoy a ride on the see-saw together.  But darn it, Uncle Bill is 240lbs. and you're only 67lbs.  How is this going to work?  You yell out to Johnny to hop on which adds 63lbs.  Mary helps out too at 56lbs.  Finally, Juan at 54lbs. balances the scales.  Johnny is at the median weight 63lbs. with two riders weighing more and two riders weighing less.  Be wary though, Uncle Bill has been know to jump off at the most inopportune time so keep a watchful eye on him. 

Back to the chart above.  The price in each of the columns reflect the point of balance wherein exactly half of the homes sold exceed the price shown and the remaining half are below that price.

    

Average Price is a lot easier to understand.  Add up every sale price for whatever time frame you're analyzing then divide it by the number of examples that led you to that figure and you've got the average.

Example:  We have Uncle Bill at 240, you at 67, Johnny at 63, Mary 56 and Juan 54 lbs. add them up.  240+67+63+56+54= 480  then divide 480 by the number of anxious see-sawers, 5 and you get 96.  480÷5=96  That's their average weight in pounds.  Uncle Bill may still threaten to jump off at the most inopportune time though so pay especially close attention when you've got him on the down stroke. 

 

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