What is the difference between a median price and average price?
Median is the middle price when all prices are sorted from lowest to highest; the average price is the price calculated by adding up all the prices and then dividing by the number of sales. Median is used more widely because it lessens the impact that one or two unrepresentative or uncharacteristically high or low prices can have on the analysis. It generally provides the more accurate picture. For instance, if five properties sell, one for $5,000,000, one for $3,000,000, one for $700,000, one for $450,000 and one for $260,000, then the median price is $700,000 but the average price is $1,882,000.
