market statistics when to buy: Problems with using median price in MLS staistics
- 11/19/08 10:43 AM
What is the median price anyways? The median is the value which divides the sequence in half, so half the homes which sell, sell for more and conversely the other half sell for less. What would be the problem with using this to broadly represent the change in home values? The real problem is when the higher priced homes start taking dramatically longer to sell! In this situation, even if prices remained the same, but the rate of sales of the higher priced homes slows (which has happened in every market I've reviewed locally) the median price will drop! (more lower … (8 comments)
What is the median price anyways? The median is the value which divides the sequence in half, so half the homes which sell, sell for more and conversely the other half sell for less. What would be the problem with using this to broadly represent the change in home values? The real problem is when the higher priced homes start taking dramatically longer to sell! In this situation, even if prices remained the same, but the rate of sales of the higher priced homes slows (which has happened in every market I've reviewed locally) the median price will drop! (more lower … (8 comments)
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