It really, really, really doesn't matter what the mathematical average is. Not unless you're an economist doing research.
This calculation simply does not work in real estate. As you said yourself, there are many factors involved in deciding on what you should offer on a home.
1. What do you qualify for?
2. How does the home suit your needs?
3. Does the location make sense for you?
I could go on and on, but the bottom line is..........you might pay $150,000 for a home that someone else would be willing to pay $175,000 for.
What you do need to be concerned with is what is the appraiser going to think it's worth -that is, if you're getting financing. No matter what you think it is worth, the bank must agree or you don't get the loan.
And keep in mind that the value of conventional sales in Wisconsin are being brought down by the surrounding sales regardless of whether they are shortsales or foreclosures.
Hope this was helpful.
In the end, each property should be looked at as individual since so many factors go into the average. The home you may be looking at may be 5% under market value already or it may be 15% over. It may be in perfect condition is may be run down and on and on.
Remember in most cases this average is taken from final asking price before an offer is accepted, many homes have reductions from list date up to accepted offer date. A good Realtor will treat each home on an individual basis since averages don't tend to mean a lot when you realize the endless amount of factors that make up that average.