I like working with statistics and trying to gauge which way the Winnetka and North Shore real estate market is heading. I run into problems, however, because each village is so small. I could lump all the villages together - Winnetka, Wilmette, Kenilworth, Glencoe and Northfield - but they are also different from each other.
Often, the numbers are skewed and basically worthless for any kind of consideration. This is particularly true when using averages in an area where a $450,000 can sell in the same town as a $10,000,000 home.
Take the most recent numbers I ran for the average sale price for the first two months of 2017 vs 2018 for Winnetka.
|2018 Average Price||2017 Average Price||Difference|
Wouldn't everyone be listing their house for sale in Winnetka if the market were really increasing at 65% in a year! A closer look reveals that there were two outlier sales of $8,875,000 and $10,000,000 and of the 22 homes that sold, only 8 were under $1 million. There goes the veracity of the averages.
A similar situation occurred in tiny Kenilworth where the home price increase was even more startling: 99% increase. In 2017 there were 4 home sales all under $1 million with two of them under $500,000. But in 2018, there were 3 sales over $1 million and one just below.
So I'm making a good case for using the median sold price - here's Winnetka again using the median measure.
|2018 Median Price||2017 Median Price||Difference|
This is a much more accurate snapshot of our real estate market for that period of time and a good reminder to be wary of all the numbers being tossed around. Using the median when calculating real estate makes sense since the median in not affected by outliers and it's the true middle of the pack number. The average will be skewed every time the high or low numbers make an appearance. However, the median can also be skewed at times - particularly when the sampling is small.
When clients ask me how the market's doing, I like to know the answers. It's just sometimes a little trickier on the North Shore to get an accurate and factual assessment given the size of the towns and disparity in home prices. But clearly, the median number should be used for real estate statistics to get a realistic view of what's happening.
To CONTACT Margaret Goss, please call 847-977-6024 or email: firstname.lastname@example.org
Margaret Goss is a full-time real estate agent since 1998 servicing the North Shore communities of Winnetka, Wilmette, Kenilworth, Glencoe, Northfield, Glenview, and Evanston. See full BIO for Margaret Goss.