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Rey, Both Buyer and Seller in Loma Del Rey, Albuqu...

What is the exact square footage when stats quote the average median price of a home?

Asked by Rey, Loma Del Rey, Albuquerque, NM Thu Oct 25, 2007

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Jim, Great explanation of median as opposed to average. So- with that in mind- why don't we use an average? It seems like it would make sense.
0 votes Thank Flag Link Thu Oct 25, 2007
Average is not the same as median. Explanation at the bottom.

Statistics are compiled at national, state, county, city, zip code, neighborhood, and subdivision level.
The statistics for average and median square footages of used homes are not as widely published on a national and state level as prices for used homes.

However by extrapolating the data from the Us Census Bureau of NEW home average or median square footages (which are coincidentally similar) from 1975 when the average and the median were both about 1500 sq feet and 2006 when both the average and the median were approximately 2100 square feet. I could deduce that in areas where the average (or the median) home was 30 years old - the average (or the median) square footage might also approxiamte 1500 square feet. - but that would be far from precise or exact.

When a Realtor does a CMA or statistical analysis for a particular zip code or neighborhood. they can give you a precise median and a precise average for both square footage and price, but just for your city, your zip, you neighborhood, or your metro area.
Quick answer: Median price is half are below, half are above
Average price: All sold prices are added together into a sum;
the sum is then divided by the number of houses that sold.

An answer to an earlier Trulia Thread with the same question:



The big difference between the median and average is illustrated in a simple example:

1. Suppose 19 workers and 1 billionaire are in a room. Everyone removes all money from their pockets and puts it on a table. Each worker puts $5 on the table; the billionaire puts $1 billion there.

The total is then $1,000,000,095. If that money is divided equally among the 20 people, each gets $50,000,004.75. That amount is the average amount of money that the 20 people brought into the room.

But the median amount is $5, since one may divide the group into two groups of 10 people each, and say that everyone in the first group brought in no more than $5, and each person in the second group brought in no less than $5. In a sense, the median is the amount that the typical person brought in. By contrast, the average is not at all typical, since nobody in the room brought in an amount approximating $50,000,004.75


http://en.wikipedia.org/wiki/Median
0 votes Thank Flag Link Thu Oct 25, 2007
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
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