About Mary Elizabeth Allen

Mary Elizabeth Allen is the Marketing Director for The Real Estate Group and oversees the brokerage's marketing and social media efforts. She has worked for nearly two decades in the marketing industry and has also been involved in real estate for five years. A passion for branding is driven by her work on such well-known brands as STAR WARS, Dungeons & Dragons, and Capital One. Since 2007, she's been immersed in real estate, gaining perspective on the industry by working on the association side, consulting with nationally-known real estate trainers, and getting the view from the brokerage side.

Average vs. Median: Understanding Real Estate Statistics

There’s an old quote that floats around about how statistics are one of the three kinds of lies.


While it’s true that numbers can often be manipulated or interpreted to support nearly any viewpoint, an understanding of the basics of statistics can help you cut through the clutter to see what’s really being represented. By having better knowledge of the language used, you can view any statistic with a more critical eye and thus be better informed.

Two of the big numbers often cited in real estate statistics are “average” and “median.” For example, many reports will cite the average home price over a period of time, or claim that median income in an area has gone up or down. Sound familiar?  Most people have seen those statistics, or something similar, numerous times, but may not understand the important distinction between what is “average” and what is the “median”:

Average = a simple mathematical calculation that involves addition and division. Take your given set of numbers and add them together. Then divide that number by the amount of numbers you added together. Example: you have three home sale prices: $250,000, $175,000, and $260,000. Added together, they equal $685,000. Divided by 3 (the number of prices you had), the AVERAGE of these sale prices comes to $228,333.

Median = the middle of any given set of numbers. Using the same numbers above, arranged in ascending order, they would be $175,000, $250,000, and $260,000. The middle number is $250,000, so therefore that is the MEDIAN home sales price.

As you can see, the same home prices yielded different median and average results. If one is used without the other, it could paint a very different picture of the current status of that particular housing market. For example, if the above prices represent the sales in Anytown for the second quarter, and the AVERAGE price for the first quarter was $240,000, an argument could be made that “prices are dropping!” On the other hand, if the MEDIAN price during the first quarter was $250,000, that would indicate that prices are steady. When viewed together, the numbers suggest one should delve further into why one is getting differing views of the same market. In this case, the sale price of $175,000 might be an outlier, skewing more common home prices downward.

That’s why it’s important to look at the data behind statistics when using those stats as part of a decision-making process. In addition to the example above, a given zip code might have a high AVERAGE home price (because of one or two sales in the luxury market) for a given time period, but a much lower MEDIAN price. Knowing the difference between the two, and investigating why they’re different, can give anyone looking to buy or sell a home more information with which to make an informed decision; it can influence your thinking about a listing or offer price or give you a better understanding of the income brackets that most often buy in your neighborhood. Consider these two statistics AND the data behind them to be just one more tool in your real estate toolbox!

About Mary Elizabeth Allen

Mary Elizabeth Allen is the Marketing Director for The Real Estate Group and oversees the brokerage's marketing and social media efforts. She has worked for nearly two decades in the marketing industry and has also been involved in real estate for five years. A passion for branding is driven by her work on such well-known brands as STAR WARS, Dungeons & Dragons, and Capital One. Since 2007, she's been immersed in real estate, gaining perspective on the industry by working on the association side, consulting with nationally-known real estate trainers, and getting the view from the brokerage side.