# NTREIS MATRIX Average Calculation Price per Sq Ft is Wrong

By
Real Estate Broker/Owner with Texas Five Star Realty, Plano Texas

NTREIS MATRIX Average Calculation for Price per Square Foot SqFt and Sold Price to List Price ratio SP%LP is Wrong

Legend:
CMA: (Comparative Market Analysis)
MLS: (Multiple Listing Services)
NTREIS (North Texas Real Estate Information System)
NTREIS
Matrix  is the primary  MLS system and includes both search and input functions.

The CMA generated report from NTREIS MATRIX provides an average Sold Price per Square foot,

Percentage of the Sold Price vs. Listed Price for selected sold properties, and average Listed Price per

Square foot for selected Active/Active Option/Cancelled/Expired and Pending properties. See Figure 1 for

Currently, the Matrix adds all numbers under each column in a group (e.g., Active Status) and divides

that by the number of items in the group. This calculation is correct for all columns except columns for

\$/SqFt and SP%LP. In the example shown below, this results in Avg \$/ SqFt =\$280.24 which is

WRONG and should be \$276.98. All incorrect numbers are circled red and their respective correct

number shown with blue color.

Question: One may ask how the calculation is correct for other columns except \$/SqFt and SP%SL.

Answer: The answer is because all other columns are independent of each other, where as Average Price

per Sq Ft (\$/SqFt) is dependent on the Listed or Sold Price AND Sq. Ft. of each property and therefore

calculated based on these two numbers. One cannot assign an arbitrary numbers for these two columns, they are calculated.

Solution: The correct way is to add all numbers under each column of List Price (or Sold Price) and

divide that by total numbers added in column SqFt  in a group to derive the correct averages for \$/SqFt

and SP%LP. This also can be achieved by simply by dividing the calculated Average for List Price

(or Sold Price) and calculated Average SqFt.

Example: Calculate the Average \$/SqFt for ACTIVE list in Plano with Listed Price =>\$2,000,000

(See Figure below)

1. Average \$ per SqFt = \$Total List Prices / Total Sq.Ft   = \$24,158,000/87215= \$276.99  OR simply

2. Divide Average List Price (OR Sold Price) by Average SqFt = \$2415800/8722 = \$276.98

Note the 1 Cent difference is due to round off (the actual Average of SqFt is 8721.5 but used as whole

integer 8722).

I caution each agent in North Texas to be aware of these inaccuracies. I have reported these to NTREIS

Matrix Committee too, hope to be fixed.

To show my points and better understand the problem, please see the following scenario for illustration

purposes only.

http://www.texasfivestarrealty.com/Matrix_Avg_Calculation_is_Wrong_2015.asp

Contact Bahman Davani at: http://www.texasfivestarrealty.com/contactus.asp

Posted by

 Bahman Davani, CMPrincipal Broker, REALTOR®, ABR®, GRI, SFR®, TAHS, CDPE, eAgentC(214) 457-7055 MobileBahman@TexasFiveStarRealty.com www.TexasFiveStarRealty.com Texas Five Star Realty
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