Newsletter
Why compare median to mean (average)?
In areas where the mean outpaces the median it is clearly indicative of a luxury market, there are more homes on the extreme high end lifting the average and making the area seem more expensive than it actually may be for what is commonly termed the “average” buyer of the “average” home, where people are actually talking about the median buyer. There is a a great explanation of the difference on NPR.org.
So when you hear that the average sales price of a single family home in Lincoln Park is over 2 million that does not mean that most of the homes will be priced in the 2 million range. Your distribution curve would center closer to 1.5 million. For example Lincoln Park with a total of 183 single family homes sold in 2007 the low sale at 2712 N Wilton was $333,935 (it would be easy to imagine this being a knockdown with some severe lot constraints) and the high end 636 W Willow with a price of $5,075,000. You also need to look at what an “average” home consists of. For our purposes we will look at the place that most closely matches the median price for these home sales and we will consider that our “average” Lincoln Park home, which just happens to be 2637 N Dayton. So someone looking for a new home with a $1,500,000 budget picking areas based on “averages” might assume Lincoln Park is over 30% more than their budget would allow even though the most of the homes are priced under their budget.
If you are out shopping areas and you hear someone throw out a high number for the average sales price, don’t get discouraged, the area might be more affordable than you think. If you you would like more information on an area in Chicago please give me a call (312) 593-5111 or send me an email shannon@moderealty.com I would be happy to send you the facts on the neighborhood you are interested in.
Next Time: I will be talking about Market Momentum, including volume of sales and % change in price.
Market Update:
single family homes
top ten markets*
*The top ten Chicago areas based on median sales price.
Remarks: 3 BEDROOM BRICK & FRAME 2 STORY. BANK OWNED SOLD AS IS. PRESENT PRE-QUAL OR PROOF OF FUNDS WITH OFFER. NO SURVEY OR TERMITE PROVIDED. EM CERTIFIED FUNDS ONLY.
Minimum Sale $333k - 2712 N Wilton
Remarks: SUPERB ARCHITECTURE ON 4 LOTS.DRAMATIC 71'GALLERY WT.13'CEILING. GRAND LIVING RM, PANELED LIBRARY, DINING RM & BREAKFAST SOLARIUM/FAMILY RM. FL-TO-CEILING WNDWS. ALL WRAP AROUND SERENE PRIV 37'X37' LANDSCAPED COURTYARD. MSTR BEDRM SUITE & GUEST BEDRM OPEN TO DECK OVERLOOKING COURTYARD. A SUN-FILLED OASIS FOR YOUR MOST SOPHISTICATED BUYERS.
Maximum Sale $5.1m - 636 W Willow
Remarks: EAST LP! PICTURESQUE & BEAUTIFULLY BUILT, NESTLED IN LUSH, PRIVATE PARK-LIKE SETTING THIS ELEGANT MASONRY HOME FEATURES FAB LAYOUT WIDE PLANK OAK FLRS, PLANTATION SHUTTERS, ALL 5 BDRMS UP. PERFECT FOR ENTERTAINING & FAMILY LIVING! SOPHISTICATED SS/GRNT KIT W/FURNITURE-QUALITY CABS OPENS TO GREAT RM,W/STONE WBFP,&SERENE GARDEN / YARD. WONDERFUL MSTR STE,ROOF DECK. WALK TO NORTH POND,HARBOR,QUICK TRANS DOWNTOWN
Median “Average” Sale $1.4m - 2637 N Dayton
Lincoln Park Distribution of home sale based on price
Top Ten Markets Median vs Average
