The median price is a widely quoted statistic used to provide a measure for housing prices.
WHAT IS IT?
Of course we all learnt at school or university that the median constitutes the middle value of an ordered set of values. So if there are 1001 sales in an area listed from the lowest to the highest, the middle or 501st sale would be the median.
HOW RELIABLE IS IT ?
John Pye Real Estate subscribes to a database showing all sales in NSW. We often see huge fluctuations of the median price from month to month in a particular suburb.
The Market Place is characterised by different market sectors having different intrinsic valves:
- Houses, Townhouses, Units
- Location factors
- Age and House size factors.
Sometimes in our core area, different sectors become the favoured sales of the month. Thus if the top end of the market becomes ‘hot’, the median price will climb out of proporton and thus this figure becomes unreliable.
Consider these factors to understand the true picture of a Market Place:
1. The Capital City median is a good macro indicator as the sample and range of sales is huge.
2. Understand the range of sales in any particular area.
3. Disregard any quoted median if the total sales is small OR if the sales for the particular month are ‘lopsided’, eg. all at one end of the market.
4. If you wish to compare your property with the median, also consider the median in your particular market sector.
5. The time period of sales.
For example; if you wish to buy a 10 year old high rise unit in Waitara then calculate the median price for 10 year old Waitara units sold in the last 6 months.
Regardless of the area we are happy to discuss this further with respect to a particular property you may own or wish to purchase.