Average Price: The Worst Statistic in Real Estate

12 October 2017

One of the worst statistics in Real is average prices. First, there is no such thing as an average house or property. Secondly, there is no such thing as an average location.

Average prices also have another major problem. It assumes that the mix of sales is the same over time, and that never happens. In the absurd, we have two sales in the spring, one at $1,000,000 and one at $500,000. The average price is $750,000. In the Fall, we have two sales again, both at $600,000. The average price has dropped by $150,000. But, for all we know, those $600,000 sales in the Fall might have only sold for $500,000 in the spring.

Ideally, you need to track the price movements of a similar or identical property over a period of time to get a real picture. The media just focuses on just average prices because it's easy and it's quick. The only way you can get the true price picture is through insider information provided by a reputable Real Estate Brokerage.

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