How to read housing market stats

How to read housing market stats 2016-02-25T18:06:08+00:00

When you’re evaluating recent sales in your neighborhood to get a clear picture of how much your home might be worth, there’s a lot of confusing terminology to wade through. Your Main Line Realtor® will be there to help you through the process (your agent will be the one who gives you a comparative market analysis, in fact), but it’s helpful to understand the definitions of all the key terms that need to play a role in your home-pricing decision.

Affordability Index

The affordability index shows whether a typical family earning a median income in your area can qualify for a mortgage to purchase an average home.

This number is measured by comparing the affordability to the number 100. The 100 means that same typical family has the precise amount of income necessary to buy a median-priced home.

When that number is higher than 100, the typical family’s income is more than adequate to buy a median-priced home. When it’s lower, it means the typical family couldn’t afford it.

Median Price

The median price in a market is the midpoint of all of the prices of homes sold during a set period of time. Remember that median is not the same thing as average; median is simply the number right in the middle of the lowest-priced home and the highest-priced home.

Here’s an example:

Three homes sold last month in your city. They sold at $125,000, $175,000 and $279,000.

The median home price, since only three homes sold across that spectrum, is $175,000.

The average home price is different. It clocks in at $193,000 (you determine the average by adding all three numbers together, then dividing by three).

Price Discount

The price discount is expressed as a percentage, and it reflects the difference between a seller’s initial asking price and the actual purchase price. In most cases, price discounts show up as an average for a particular set of transactions.

For example, a home that was originally priced at $200,000 and was sold for $190,000 has a 5 percent price discount. When the percentage is small, that usually indicates you’re operating in a seller’s market. When it’s high, it’s a buyer’s market.

Still Have Questions? Let’s Talk.

Call us at or fill out our online contact form to learn more about how to read housing market stats and get your free CMA. We’re among the most experienced Visalia real estate agents, and we’d love to help you sell your home.

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