Estate Agents, San Francisco, CAMedian versus Mean Home Sale Value
On May 17, 2011 the Marin Independent Journal headlines reported that April Home Sales Up Slightly in Marin, But Prices Still Down. The accompanying chart provided by the Marin County Assessor's Office that ran with this article would question those conclusions.
Once you understand the difference between "Median Home Sale Value" and "Mean (average) Home Sales Value" you might want to question these kinds of analysis.
In a world of statistical averages, many have asked why anyone would report a median home sale value instead of a mean average? Many people believe the mean/average is easier to understand than the median, but the median measure is not too difficult to appreciate. Before addressing the chart in yesterday's Marin Independent Journal article let me start by defining the difference between the two measures.
A mean/average value is calculated by adding up all the values in a distribution, and then dividing the sum by the total number of values contained in the distribution. To find a median value, one talkes all the values in the distribution, sorts in ascending order, lines them up and finds the miiddle value.
Though they sound similar, and in many instances, there is not too much difference between the two values. The reason a lot of newspapers focus on the Median instead of the Mean is because the mean value calculation has a limitation that can prevent it from reflecting an "Average?" In calculating home sales price statistics this limitation occurs when the sale price of one home varies greatly from the remainder of the homes which can skewer the average.
The chart in yesterday's Marin Independent Journal (not the chart above) reflected sales compared from April of 2010 to sales in April of 2011. With only 3 sales in Belvedere last month the median percent change from 2010 where there had been 4 sales was a negative 25%. Did property values in Belvedere come down 25%? No, and that's why people need to understand how and why this methodology oftentimes skewers the reality of what's actually happening.
Yesterday's chart also showed that Ross, that only had 2 sales in April of 2010 and 5 sales in April of 2011, was up 150%. Did property values in Ross increase by 150%?
This kind of data tends to confuse the general public. When you'd like to have know what's really going on, check with your LOCAL real estate professional. If you'd like to find out what your home is really worth in today's real estate market, feel free to contact me.
Once you understand the difference between "Median Home Sale Value" and "Mean (average) Home Sales Value" you might want to question these kinds of analysis.
In a world of statistical averages, many have asked why anyone would report a median home sale value instead of a mean average? Many people believe the mean/average is easier to understand than the median, but the median measure is not too difficult to appreciate. Before addressing the chart in yesterday's Marin Independent Journal article let me start by defining the difference between the two measures.
A mean/average value is calculated by adding up all the values in a distribution, and then dividing the sum by the total number of values contained in the distribution. To find a median value, one talkes all the values in the distribution, sorts in ascending order, lines them up and finds the miiddle value.
Though they sound similar, and in many instances, there is not too much difference between the two values. The reason a lot of newspapers focus on the Median instead of the Mean is because the mean value calculation has a limitation that can prevent it from reflecting an "Average?" In calculating home sales price statistics this limitation occurs when the sale price of one home varies greatly from the remainder of the homes which can skewer the average.
The chart in yesterday's Marin Independent Journal (not the chart above) reflected sales compared from April of 2010 to sales in April of 2011. With only 3 sales in Belvedere last month the median percent change from 2010 where there had been 4 sales was a negative 25%. Did property values in Belvedere come down 25%? No, and that's why people need to understand how and why this methodology oftentimes skewers the reality of what's actually happening.
Yesterday's chart also showed that Ross, that only had 2 sales in April of 2010 and 5 sales in April of 2011, was up 150%. Did property values in Ross increase by 150%?
This kind of data tends to confuse the general public. When you'd like to have know what's really going on, check with your LOCAL real estate professional. If you'd like to find out what your home is really worth in today's real estate market, feel free to contact me.
May 17 2011 Marin Independent Journal Article
Posted by GutekunstLomas2012 at 5/18/2011 7:46 AM 
Categories: uncategorized
Tags: marin realtormarin realtorsmarin homes for salemarinmarin countymark lomas
Categories: uncategorized
Tags: marin realtormarin realtorsmarin homes for salemarinmarin countymark lomas
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