Median Prices and Average Prices

You may have seen newspaper stories about the decline in median sale prices for residential real estate in Tampa. A casual reader might see a headline “Wesley Chapel Home Prices down by 5%” and conclude that the value of their home has decreased by 5% – which is not necessarily true. Upon closer examination, there is a big difference between a median sale price and the average sale price. These are two statistical terms: Median means half of all purchases fall below that sales price, and half are above it; while the Average is obtained by adding up all the sale prices and dividing by the total number of sales.

For example, if there were 5 sales in Seven Oaks totaling $200K, $300K, $400K, $500K and $900K; the median is $400K because half the sales were below and half were above. The average is $460,000. The widely reported decline in median sale prices means that lower priced homes have been selling more frequently than higher priced homes. A more valid determination of your home’s value can be found by examining recent sales in your neighborhood, and in communities similar to yours. For a free Comparative Home Value Analysis, contact Team Bohannon today.