In real estate, both the average sales price and the median sales price are measures used to understand the pricing trends within a specific market. However, they represent slightly different concepts and can provide different insights into the market conditions.

Average Sales Price: The average sales price, also known as the mean sales price, is calculated by adding up the total sales prices of all properties sold in a particular area during a specific period (such as a month or a year) and then dividing that sum by the total number of properties sold. Mathematically, it is represented as:

Average Sales Price = Total Sales Prices of Properties / Number of Properties Sold

The average sales price is sensitive to outliers or extreme values, meaning that a few very high-priced or low-priced properties can significantly skew the average. As a result, the average sales price may not always accurately reflect the typical or most common pricing within the market, especially in areas with a wide range of property values.

Median Sales Price: The median sales price, on the other hand, represents the middle value in a list of all sales prices arranged in ascending or descending order. To calculate the median sales price, you simply arrange all the sales prices from lowest to highest (or highest to lowest) and identify the price that falls exactly in the middle. If there is an even number of sales prices, the median is calculated as the average of the two middle values.

The median sales price is less affected by outliers compared to the average sales price because it focuses on the middle value rather than the total sum of all prices. It provides a more accurate representation of the typical or "average" property price within the market and is often used as a more reliable measure of central tendency in real estate analysis.

Key Differences:

• The average sales price takes into account the total sum of all sales prices and divides it by the number of properties sold, while the median sales price identifies the middle value in a list of all sales prices.

• The average sales price can be influenced by outliers, while the median sales price is less affected by extreme values.

• The average sales price may not accurately reflect the typical pricing within the market, especially in areas with a wide range of property values, whereas the median sales price provides a more reliable measure of central tendency.

Both the average and median sales prices are valuable metrics in real estate analysis, and they are often used together to provide a comprehensive understanding of pricing trends within a specific market.

The Bank of Canada today increased its target for the overnight rate to 3¾%, with the Bank Rate at 4% and the deposit rate at 3¾%. The Bank is also continuing its policy of quantitative tightening.

Inflation around the world remains high and broadly based. This reflects the strength of the global recovery from the pandemic, a series of global supply disruptions, and elevated commodity prices, particularly for energy, which have been pushed up by Russia’s attack on Ukraine. The strength of the US dollar is adding to inflationary pressures in many countries. Tighter monetary policies aimed at controlling inflation are weighing on economic activity around the world. As economies slow and supply disruptions ease, global inflation is expected to come down.

In the United States, labour markets remain very tight even as restrictive financial conditions are slowing economic activity. The Bank projects no growth in the US economy through most of next year. In the euro area, the economy is forecast to contract in the quarters ahead, largely due to acute energy shortages. China’s economy appears to have picked up after the recent round of pandemic lockdowns, although ongoing challenges related to its property market will continue to weigh on growth. Overall, the Bank projects that global growth will slow from 3% in 2022 to about 1½% in 2023, and then pick back up to roughly 2½% in 2024. This is a slower pace of growth than was projected in the Bank’s July Monetary Policy Report (MPR).

In Canada, the economy continues to operate in excess demand and labour markets remain tight. The demand for goods and services is still running ahead of the economy’s ability to supply them, putting upward pressure on domestic inflation. Businesses continue to report widespread labour shortages and, with the full reopening of the economy, strong demand has led to a sharp rise in the price of services.

The effects of recent policy rate increases by the Bank are becoming evident in interest-sensitive areas of the economy: housing activity has retreated sharply, and spending by households and businesses is softening. Also, the slowdown in international demand is beginning to weigh on exports. Economic growth is expected to stall through the end of this year and the first half of next year as the effects of higher interest rates spread through the economy. The Bank projects GDP growth will slow from 3¼% this year to just under 1% next year and 2% in 2024. 

In the last three months, CPI inflation has declined from 8.1% to 6.9%, primarily due to a fall in gasoline prices. However, price pressures remain broadly based, with two-thirds of CPI components increasing more than 5% over the past year. The Bank’s preferred measures of core inflation are not yet showing meaningful evidence that underlying price pressures are easing. Near-term inflation expectations remain high, increasing the risk that elevated inflation becomes entrenched.

The Bank expects CPI inflation to ease as higher interest rates help rebalance demand and supply, price pressures from global supply disruptions fade, and the past effects of higher commodity prices dissipate. CPI inflation is projected to move down to about 3% by the end of 2023, and then return to the 2% target by the end of 2024.

Given elevated inflation and inflation expectations, as well as ongoing demand pressures in the economy, the Governing Council expects that the policy interest rate will need to rise further. Future rate increases will be influenced by our assessments of how tighter monetary policy is working to slow demand, how supply challenges are resolving, and how inflation and inflation expectations are responding. Quantitative tightening is complementing increases in the policy rate. We are resolute in our commitment to restore price stability for Canadians and will continue to take action as required to achieve the 2% inflation target.

Home sales in Ocean Park, South Surrey, BC.

These comparable homes, same size sqft, similar lot size, age and location sold just 6 months apart.  Can you even guess the price difference?

As we keep hearing, home pricing has come down in the last few months but here is a really great example of just how much.

Sale price of Just Sold is $1,465,000

Sale price of Sold Feb/22 $1,830,000

That's a difference of $365,000 that is almost 25% in 6 months!!!

When you sell you are also buying into the same market so it often equals out in the end.
In the long term Real Estate is always a great investment.

Contact me for a customized analysis and I will work out a real estate strategy that works best for you and your goals.

3 Important tips

1.) Know your market.  Who is most likely going to buy your home?  Your local Real Estate Professional will likely know the answer to this question but you may too.  Who is moving into your neighborhood. Families, downsizers, singles?  Get ready to sell with these buyers in mind.

2.) Declutter, clean and paint if necessary, make sure the rooms are showing bright and clean. Fix anything that needs repair. As per above have potential buyers in mind when staging so they can see themselves living there. Marketing your home correctly from the start will ensure great photography and that your home is looking it's best from the start for potential buyers.

3.) Remember pricing it right from the start is key in this market.  If you price yourself too high then you will not get the activity you need to sell in this market. Your home holds the most value in the first 2-3 weeks of it's listing. You don't want to sit on the market high and have pricing go down.  This is very frustrating,  as you will just be falling behind the market and ultimately selling for less than you would have,  had you priced it correctly from the start. 

This market is still a great market to sell in and it doesn't have to be as frustrating if you follow these steps.  Your home can still sell quickly and get you to where you want to go!

Call me for a more customized analysis of your home.