Real Estate Indicators
Economic drivers relating to the real estate industry
Real Estate Indicators Definitions
Median Resale Price: Median prices for sales of existing single-family homes and condominiums are two of the most important series in evaluating real estate conditions. Home prices tend to lag construction activity in both directions. For example, falling prices indicate a situation where existing housing stocks are able to meet or exceed demand, discouraging investment in further new home construction. Median prices are more useful in measuring overall market conditions than average prices because they are less likely to be distorted by a few extremely high or low sales, and come closer to describing the typical home sale.
For example, suppose there are five condominiums that sell for $200,000 and one that sells for $2,000,000. The average condo price for the six units in that scenario is $500,000, which is not very close to any of the condos actually sold. The average in this case is being driven up by the single luxury condo outlier that is not like the rest of the units that were sold. By contrast, the median condo price for these six units would be $200,000, which gives us a better idea of the typical unit sold in this market.