Understanding the Median Price Stat

A message I received earlier today:

“Your website is fraught with severe calculation errors. It’s impossible that the Median has remained at $420,000 when there were 50 homes under that price sold that day…”

I’ll attempt to clarify how the Median Price stat works, because I suppose it can look questionable when you don’t have all the numbers.

The median is calculated by lining up all sales from lowest to highest, the median would be the price in the middle.

Yes, 46 homes sold yesterday, and the median was $412,500. What you’re not taking into consideration is the amount that have sold at each price.

This month 8 homes have sold for exactly $420,000. That means it can take 8 homes more that sell below the median of $420k than sold above $420k in a day to move the current median downwards.

The median yesterday was $412,500. But being that there were an even number of sales (46) the two median numbers actually were $406k & $419k (resulting in a $412,500 median) The next highest price was $432k. So, yesterdays median price of $412,500 was only 1 sale amount below the Month-to-date median. And seeing that there are 8 sales at $420,000 it can theoretically take 8 sales below the median price MORE sold in a day to even move it. Likewise, it will take that same amount to move it upwards as well.

Here’s an example that reflects our current situation this month:

Sold Prices Month-to-date

$419,000
$420,000 (#1)
$420,000 (#2)
$450,000
$500,000

Let’s pretend our current Month-to-date median price was at $420k, as illustrated above.

Now today, we have the following 3 sales:

$300,000
$375,000
$380,000
$800,000

Our median for the day would be $377,500 (the two middle figures divided by two) which is well below our median for the month. But now let’s line up all the sales again, including the 3 that sold today:

$300,000
$375,000
$380,000
$419,000
$420,000 (#1)
$420,000 (#2)
$450,000
$500,000
$800,000

It’s still at $420,000 (#1) – but not the same sale that was the median at $420,000 previously (#2).

I hope this has clarified any confusion or problems. If you do see an obvious error (for instance I noticed I had Vacant Listings yesterday at 2217 instead of 1217) please let me know so I can correct it ASAP.

Thanks for your time, and I hope you continue to find the stats useful.

You can view the Calgary daily MLS Stats here: FindCalgary.ca
You can view Bob Truman’s Weekly Stats and more, here: www.Bobtruman.com