Median Price Vs. Average Price
Often times in real estate statistics, we refer to median price and average price. So which is better?
To arrive at the average price, one would take the sum of the values and divide it by the number of prices being analyzed. This would give you the average.
Median price would be the number where half the numbers are lower and half the numbers are higher. In Real Estate, that means the median is the price where half the homes sold that month were less expensive and half were more expensive.
Below are 2 examples of fictitious real estate sales. Median Vs. Average
Example 1
1. 100,000
2. 102,000
3. 103,000
4. 105,000
5. 108,000
6. 109,000
7. 113,000
8. 113,000
Average price = $106,625
Median price = $106,500
note: because the median would be between 4 & 5, add 105,000 + 108,000 / 2 = $106,500
As seen above, these 2 numbers came in very close from each other, but that’s not always the case.
Example 2
1. 100,000
2. 103,000
3. 107,000
4, 108,000
5. 109,000
6. 110,000
7. 510,000
Average price = $163,857
Median price = $108,000
The clear winner of this would be the median price in most all circumstances. When analyzing data within a neighborhood, zip code, or city, we are able to capture a fair amount of data. Average price can be skewed high by a handful of very high-dollar transactions while median will remain more consistent.
When looking at statistics and market reports, keep an eye out for Median over Average.
Effective January 26, 2015
FHA recently announced a reduction of 50 basis points (0.50%) on all new 30-year loans, making homeownership more affordable. This is the first time we’ve seen a reduction in MIP (mortgage insurance premium) since 2001.
FHA is not a mortgage lender; it’s a mortgage insurer. Just like most insurers, the FHA collects payments known as premiums to fund the claims it pays to lenders.
FHA mortgage insurance premiums are split into two categories:
The complete MIP schedule for FHA loans of $625,00 or less, are as follow:
To add more beauty to this, rates are at their lowest levels in close to two years. It’s an amazing time to buy or refinance. If we can be of any assistance, please contact us.
Happy New Year! We are excited about all the new growth and opportunity that lies ahead this year. At Call Realty, we wish you all the success that you deserve. Let’s make this year one to remember.
Let’s think this through when searching for a home. This applies to anyone searching for a home with or without a real estate agent. Follow this method of searching and you will have more homes to choose from. Why eliminate properties in your price range without knowing they exist?
For reference purposes I created a broad search. Obviously when searching for a home you will narrow it down more with more specifics.
Let’s say as a “Buyer” you either qualify or are looking for homes in the low to mid $300,000. You or your agent may search for homes $300,000 – $350,000. If you’re agent creates a “search portal” in the range of $300,000 – $350,000, or if you do your own searching with those criteria, you will be missing out on more homes.
In the broad search that I conducted through the MLS, I used the following criteria.
RESULTS:
The search results speak for themselves. Many real estate agents still like to use the 99 “advertising” method. That’s another discussion. Keeping that in mind, simply by reducing your search by $1,000 from 30ok to 299k, will result in possibly more than 10% more properties. Those 10% properties just might be the home you were hoping for.
Bottom line, think smart when searching for homes. If you are working with a real estate agent, communicate with him/her on how your search portal is created. I bring this up because many people don’t set their searches up saying, “let’s search 299k-300k. Most would round up to 300k-350k.
Hopefully you find this helpful.
Office: 480-988-7100
info@callrealtyaz.com
