What is Median Price?
Median price is one way that home prices can be measured to evaluate all home prices or home values in a specific area. The median price should not be confused with mean price or average price. Though median and mean are both measures of central tendency (meaning they both evaluate how data clusters at the center), they are not calculated in the same way. To get the median price in a specific housing market, realtors may compile lists of all homes for sale, ranking from lowest to highest price. The house that falls in the direct middle of that list of homes gives the median price for the area. Essentially this price tells buyers that half of the homes will be less than the price and half will be more than it. It doesn’t tell buyers how much less or more. This is why realtors may also comprise lists that evaluate mean or average price. In this scenario all home prices are summed and then divided by the number of homes for sale, giving average home price. Sometimes mean price is a better
