SPONSORED BY: Charlotte Real Estate Investors group

1/7/2011

Banks lose key foreclosure ruling in top Massachusetts court

By Jonathan Stempel and Dena Aubin Jonathan Stempel And Dena Aubin Fri Jan 7, 4:58 pm ET

NEW YORK (Reuters) – In a decision that may slow foreclosures nationwide, Massachusetts’ highest court voided the seizure of two homes by Wells Fargo & Co and US Bancorp after the banks failed to show they held the mortgages at the time they foreclosed.

Bank shares fell, weighing on broader stock indexes, on fears the decision could threaten lenders’ ability to work through hundreds of thousands of pending foreclosures.

The Supreme Judicial Court of Massachusetts’ unanimous decision on Friday upheld a lower court ruling. It is among the earliest cases to address the validity of foreclosures done without proper documentation.

That issue, including the use of “robo-signers” who approved foreclosure documents without reviewing them, last year prompted an uproar that led lenders such as Bank of America Corp, JPMorgan Chase & Co and Ally Financial Inc to temporarily stop seizing homes.

“A ruling like this will slow down the foreclosure process” for lenders, said Marty Mosby, an analyst at Guggenheim Securities in Memphis, Tennessee. “They’re going to have to be really precise and get everything in order. It doesn’t leave a lot of wiggle room.”

Wells Fargo and U.S. Bancorp lacked authority to foreclose after having “failed to make the required showing that they were the holders of the mortgages at the time of foreclosure,” Justice Ralph Gants wrote for the Massachusetts court.

In a concurring opinion, Justice Robert Cordy lambasted “the utter carelessness” that the banks demonstrated in documenting their right to own the properties.

Courts in other U.S. states are considering similar cases, and all 50 state attorneys general are examining whether lenders are forcing people out of their homes improperly.

Friday’s decision applies in Massachusetts, and need not be followed by federal judges or by courts in other states.

Nonetheless, “it will be certainly cited as persuasive authority by anybody in a similar scenario who’s trying to hold onto his home,” said Robert Nislick, a real estate lawyer at Marcus, Errico, Emmer & Brooks PC in Braintree, Massachusetts.

LEAVING PAPERWORK BEHIND

Analysts said the decision may also raise the specter that loans transferred improperly will need to be bought back.

“What they were doing was peddling these mortgages and leaving the paperwork behind,” said Michael Pill, a real estate partner at Green, Miles, Lipton & Fitz-Gibbon LLP in Northampton, Massachusetts who is not involved in the case.

The Massachusetts court rejected a request by the banks to apply the decision only in future cases, leaving homeowners already foreclosed upon without a remedy. Gants chided the banks for ignoring settled rules in their “rush” to sell mortgage-backed securities.

A spokeswoman for San Francisco-based Wells Fargo, Teri Schrettenbrunner, had no immediate comment on the decision.

U.S. Bancorp spokesman Steve Dale said the decision has no financial impact on the Minneapolis-based bank, which has “no responsibility” for the terms or means of transfer of mortgages used in the securitization trusts it oversees as trustee.

Martha Coakley, Massachusetts’ attorney general, praised Friday’s decision. “In their careless and hasty stampede to securitize loans, the banks moved at their own peril,” she said. “They should bear the brunt and the cost of the remedy.”

In Friday trading, Wells Fargo shares closed down 65 cents, or 2 percent lower, at $31.50, while U.S. Bancorp shares fell 20 cents, or 0.8 percent, at $26.09.

Bank of America stock fell 1.3 percent and JPMorgan fell 1.9 percent, and the KBW Bank Index fell 0.9 percent. Broader share indexes declined about 0.2 percent.

Bank shares recovered some losses after it was revealed that Maine’s highest court on Thursday allowed JPMorgan to conduct a foreclosure proceeding despite not having possessed the underlying mortgage until after that process began.

NOT IMMUNE

In the Massachusetts case, U.S. Bancorp and Wells Fargo had said they controlled through different trusts the respective mortgages of Antonio Ibanez and the married couple Mark and Tammy LaRace, who lost their homes to foreclosure in 2007.

The banks bought the Springfield, Massachusetts, homes in foreclosure, and sought court orders confirming they had title. A lower court judge ruled against them in March 2009.

“It is the first time the supreme court of a state has looked straight at securitization practices and told the industry, you are not immune from state statutes and homeowner protections,” Paul Collier, a lawyer for Ibanez, said in an interview.

Massachusetts is one of 27 U.S. states that do not require court approval to foreclose.

“I’m ecstatic,” Glenn Russell, a lawyer for the LaRaces, said in an interview. “The fact the decision applies retroactively could mean thousands of homeowners can seek recovery for homes wrongfully foreclosed upon.”

Russell said the LaRaces moved back to their home after the 2009 ruling, while Collier said Ibanez has not. “U.S. Bancorp will have to compensate him in exchange for the deed, or will have to walk away,” Collier said.

Analysts said the decision could make it harder to sell homes, and perhaps weigh on the nation’s economic recovery.

“The inventory on foreclosures will keep a lid on housing prices for some time,” said Blake Howells, head of equity research at Becker Capital Management in Portland, Oregon.

Gants did suggest in his opinion how banks might properly transfer mortgages via securitization trusts.

“The executed agreement that assigns the pool of mortgages, with a schedule of the pooled mortgage loans that clearly and specifically identifies the mortgage at issue as among those assigned, may suffice to establish the trustee as the mortgage holder,” Gants wrote. “However, there must be proof that the assignment was made by a party that itself held the mortgage.”

The American Securitization Forum, a trade group, in a statement said it “is confident securitization transfers are valid and fully enforceable.”

The cases are U.S. Bank N.A. v. Ibanez and Wells Fargo Bank NA v. LaRace et al, Supreme Judicial Court of Massachusetts, No. SJC-10694.

(Reporting by Jonathan Stempel and Dena Aubin; Additional reporting by Joe Rauch and Dan Wilchins; Editing by Matthew Lewis, Dave Zimmerman and Tim Dobbyn)

Incoming search terms for the article:

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Home Prices Gain in 91 U.S. Cities in First Quarter
May 11, 2010, 12:00 PM EDT

By Kathleen M. Howley

May 11 (Bloomberg) — Home prices rose in 91 U.S. cities in the first quarter as states hard hit by foreclosures began to recover and a tax credit cut the number of properties for sale.

The median price of a single-family home sold in Saginaw, Michigan, doubled to $60,800, the Chicago-based National Association of Realtors said in a report today. Prices in Akron, Ohio, climbed 90 percent to $95,300 and Grand Rapids, Michigan, recorded a 26 percent increase to $90,700. Nationally, the median declined 0.7 percent.

Cities that led the nation in foreclosures a year earlier had the biggest price increases as a tax credit of as much as $8,000 boosted demand and drove the supply of unsold homes to a four-year low in January, according to Lawrence Yun, chief economist for the Realtors’ group. Brian Bethune, chief U.S. financial economist for IHS Global Insight, said an improving job market should sustain the fledgling rebound in real estate.

“In the second half of the year, employment growth and an improving economic situation should keep the housing recovery on track,” Bethune said in a telephone interview from his Lexington, Massachusetts, office.

Today’s report showed the recovery accelerating from the fourth quarter when 67 metropolitan areas reported price gains.

Peak to Trough

The U.S. median home price tumbled 29 percent over three and a half years as defaults among subprime borrowers flooded the housing market with cheaply priced foreclosures and Wall Street piled up $1.78 trillion in losses and asset writedowns.

The median prices of an existing U.S. home peaked at $230,300 in July of 2006 and hit a low of $164,600 in February, according to NAR data. The drop was 13 percent in 2009, outpacing 2008’s 9.5 percent decline.

This year, prices may increase 2.5 percent as the economy improves, according to the Realtors’ forecast.

The median price of a single-family home in the New York metropolitan area rose 1.8 percent to $380,400 in the three months ended March 31. The areas surrounding New Haven and Milford, Connecticut, gained 5.3 percent to $227,900.

The Edison, New Jersey, region had a 1.5 percent gain in the median price; and Hartford, Connecticut, posted a 1.6 percent increase to $225,900. Prices in the Boston metropolitan area increased 11 percent to $321,800.

Transactions Fall

In a separate report, NAR said U.S. sales dropped 14 percent in the first quarter from the prior period, mostly because buyers rushed to purchase homes in the fourth quarter when the tax credit for purchases was originally set to expire.

Congress ultimately extended and expanded the credit for purchase contracts signed by April 30.

South Dakota led the nationwide sales decline with transactions falling 33 percent in the first quarter. Sales in Pennsylvania and Idaho dropped 28 percent. Connecticut transactions decreased almost 15 percent and New York sales were down 9.4 percent, NAR said.

Nationally, home sales probably will rise 4.3 percent to 5.38 million this year and gain 5.1 percent to 5.66 million in 2011, according to a forecast posted on NAR’s website. In 2009, sales climbed for the first time in four years to 5.16 million.

To talk about the market call me today at (704)840-4137.

courtsey of Bloomberg.net

In reporting a number of key real estate market statistics, there two statistical measures – MEDIAN and AVERAGE – that can be confusing to understand sometimes. Let’s take a minute to explain the difference.

AVERAGE is the term that is used more frequently in newspapers and on TV, but MEDIAN PRICE are usually a more accurate way to look at home prices in a city or neighborhood.

For example, let’s say that there are 10 homes for sale in a city. The prices of the homes are:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

To calculate the AVERAGE PRICE, we would add up the prices of these 10 homes and divide by 10:

($250,000 + $275,000 + $285,000 + $300,000 + $315,000 + $300,000 + $500,000 + $550,000 + $600,000 + $1,200,000) / 10 = $457,000

We’ve calculated that the AVERAGE PRICE in this city is $457,000.

So how is that different from the MEDIAN PRICE?

The MEDIAN PRICE is “the number in the middle.” To find the MEDIAN PRICE, you simply to put the values in order from lowest to highest, and then find the number that is exactly in the middle. Using our same 10 properties for sale:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

We can divide the 10 properties into two equal groups:

$250,000
$275,000
$285,000
$300,000
$300,000

$315,000
$500,000
$550,000
$600,000
$1,200,000

So the MEDIAN PRICE is somewhere between $300,000 and $315,000.

To calculate the MEDIAN PRICE, you just take the two values in the middle and divide by 2:

MEDIAN PRICE = ($300,000 + $315,000) / 2 = $307,000

So here we’ve calculated that the MEDIAN HOME PRICE in this city is $307,000. As you can see, this is very different from the Average Home Price of $457,000.

This is an important distinction to make because the AVERAGE PRICE in this city is greatly influenced by the one expensive home at the top of the market selling for $1,200,000. But, the MEDIAN PRICE is just an even count of how many homes are above or below the midpoint – a more accurate representation of prices in a neighborhood.

You can use the same analysis for other key statistics such as DAYS ON MARKET. Suppose that you have a couple of properties that have been on the market for an extended time. If you use AVERAGE DAYS ON MARKET, the number will be much higher than if you were to calculate the MEDIAN DAYS ON MARKET.

Here’s a specific example:

What if you’re working with a buyer that can afford up to $325,000 for a home? If you use the AVERAGE PRICE of $457,000 for the neighborhood, it appears that that area might be too expensive for the buyer. But, if you use the MEDIAN PRICE of $307,000, then this neighborhood will be right in the buyer’s zone.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

research provided by Altos Research

In reporting a number of key real estate market statistics, there two statistical measures – MEDIAN and AVERAGE – that can be confusing to understand sometimes. Let’s take a minute to explain the difference.

AVERAGE is the term that is used more frequently in newspapers and on TV, but MEDIAN PRICE are usually a more accurate way to look at home prices in a city or neighborhood.

For example, let’s say that there are 10 homes for sale in a city. The prices of the homes are:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

To calculate the AVERAGE PRICE, we would add up the prices of these 10 homes and divide by 10:

($250,000 + $275,000 + $285,000 + $300,000 + $315,000 + $300,000 + $500,000 + $550,000 + $600,000 + $1,200,000) / 10 = $457,000

We’ve calculated that the AVERAGE PRICE in this city is $457,000.

So how is that different from the MEDIAN PRICE?

The MEDIAN PRICE is “the number in the middle.” To find the MEDIAN PRICE, you simply to put the values in order from lowest to highest, and then find the number that is exactly in the middle. Using our same 10 properties for sale:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

We can divide the 10 properties into two equal groups:

$250,000
$275,000
$285,000
$300,000
$300,000

$315,000
$500,000
$550,000
$600,000
$1,200,000

So the MEDIAN PRICE is somewhere between $300,000 and $315,000.

To calculate the MEDIAN PRICE, you just take the two values in the middle and divide by 2:

MEDIAN PRICE = ($300,000 + $315,000) / 2 = $307,000

So here we’ve calculated that the MEDIAN HOME PRICE in this city is $307,000. As you can see, this is very different from the Average Home Price of $457,000.

This is an important distinction to make because the AVERAGE PRICE in this city is greatly influenced by the one expensive home at the top of the market selling for $1,200,000. But, the MEDIAN PRICE is just an even count of how many homes are above or below the midpoint – a more accurate representation of prices in a neighborhood.

You can use the same analysis for other key statistics such as DAYS ON MARKET. Suppose that you have a couple of properties that have been on the market for an extended time. If you use AVERAGE DAYS ON MARKET, the number will be much higher than if you were to calculate the MEDIAN DAYS ON MARKET.

Here’s a specific example:

What if you’re working with a buyer that can afford up to $325,000 for a home? If you use the AVERAGE PRICE of $457,000 for the neighborhood, it appears that that area might be too expensive for the buyer. But, if you use the MEDIAN PRICE of $307,000, then this neighborhood will be right in the buyer’s zone.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

research provided by Altos Research

In reporting a number of key real estate market statistics, there two statistical measures – MEDIAN and AVERAGE – that can be confusing to understand sometimes. Let’s take a minute to explain the difference.

AVERAGE is the term that is used more frequently in newspapers and on TV, but MEDIAN PRICE are usually a more accurate way to look at home prices in a city or neighborhood.

For example, let’s say that there are 10 homes for sale in a city. The prices of the homes are:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

To calculate the AVERAGE PRICE, we would add up the prices of these 10 homes and divide by 10:

($250,000 + $275,000 + $285,000 + $300,000 + $315,000 + $300,000 + $500,000 + $550,000 + $600,000 + $1,200,000) / 10 = $457,000

We’ve calculated that the AVERAGE PRICE in this city is $457,000.

So how is that different from the MEDIAN PRICE?

The MEDIAN PRICE is “the number in the middle.” To find the MEDIAN PRICE, you simply to put the values in order from lowest to highest, and then find the number that is exactly in the middle. Using our same 10 properties for sale:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

We can divide the 10 properties into two equal groups:

$250,000
$275,000
$285,000
$300,000
$300,000

$315,000
$500,000
$550,000
$600,000
$1,200,000

So the MEDIAN PRICE is somewhere between $300,000 and $315,000.

To calculate the MEDIAN PRICE, you just take the two values in the middle and divide by 2:

MEDIAN PRICE = ($300,000 + $315,000) / 2 = $307,000

So here we’ve calculated that the MEDIAN HOME PRICE in this city is $307,000. As you can see, this is very different from the Average Home Price of $457,000.

This is an important distinction to make because the AVERAGE PRICE in this city is greatly influenced by the one expensive home at the top of the market selling for $1,200,000. But, the MEDIAN PRICE is just an even count of how many homes are above or below the midpoint – a more accurate representation of prices in a neighborhood.

You can use the same analysis for other key statistics such as DAYS ON MARKET. Suppose that you have a couple of properties that have been on the market for an extended time. If you use AVERAGE DAYS ON MARKET, the number will be much higher than if you were to calculate the MEDIAN DAYS ON MARKET.

Here’s a specific example:

What if you’re working with a buyer that can afford up to $325,000 for a home? If you use the AVERAGE PRICE of $457,000 for the neighborhood, it appears that that area might be too expensive for the buyer. But, if you use the MEDIAN PRICE of $307,000, then this neighborhood will be right in the buyer’s zone.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

research provided by Altos Research

In reporting a number of key real estate market statistics, there two statistical measures – MEDIAN and AVERAGE – that can be confusing to understand sometimes. Let’s take a minute to explain the difference.

AVERAGE is the term that is used more frequently in newspapers and on TV, but MEDIAN PRICE are usually a more accurate way to look at home prices in a city or neighborhood.

For example, let’s say that there are 10 homes for sale in a city. The prices of the homes are:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

To calculate the AVERAGE PRICE, we would add up the prices of these 10 homes and divide by 10:

($250,000 + $275,000 + $285,000 + $300,000 + $315,000 + $300,000 + $500,000 + $550,000 + $600,000 + $1,200,000) / 10 = $457,000

We’ve calculated that the AVERAGE PRICE in this city is $457,000.

So how is that different from the MEDIAN PRICE?

The MEDIAN PRICE is “the number in the middle.” To find the MEDIAN PRICE, you simply to put the values in order from lowest to highest, and then find the number that is exactly in the middle. Using our same 10 properties for sale:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

We can divide the 10 properties into two equal groups:

$250,000
$275,000
$285,000
$300,000
$300,000

$315,000
$500,000
$550,000
$600,000
$1,200,000

So the MEDIAN PRICE is somewhere between $300,000 and $315,000.

To calculate the MEDIAN PRICE, you just take the two values in the middle and divide by 2:

MEDIAN PRICE = ($300,000 + $315,000) / 2 = $307,000

So here we’ve calculated that the MEDIAN HOME PRICE in this city is $307,000. As you can see, this is very different from the Average Home Price of $457,000.

This is an important distinction to make because the AVERAGE PRICE in this city is greatly influenced by the one expensive home at the top of the market selling for $1,200,000. But, the MEDIAN PRICE is just an even count of how many homes are above or below the midpoint – a more accurate representation of prices in a neighborhood.

You can use the same analysis for other key statistics such as DAYS ON MARKET. Suppose that you have a couple of properties that have been on the market for an extended time. If you use AVERAGE DAYS ON MARKET, the number will be much higher than if you were to calculate the MEDIAN DAYS ON MARKET.

Here’s a specific example:

What if you’re working with a buyer that can afford up to $325,000 for a home? If you use the AVERAGE PRICE of $457,000 for the neighborhood, it appears that that area might be too expensive for the buyer. But, if you use the MEDIAN PRICE of $307,000, then this neighborhood will be right in the buyer’s zone.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

research provided by Altos Research

3; text-shadow:auto;mso-ansi-language:EN-US;mso-fareast-language:EN-US;mso-bidi-language: AR-SA’>provided by Altos Research

In reporting a number of key real estate market statistics, there two statistical measures – MEDIAN and AVERAGE – that can be confusing to understand sometimes. Let’s take a minute to explain the difference.

AVERAGE is the term that is used more frequently in newspapers and on TV, but MEDIAN PRICE are usually a more accurate way to look at home prices in a city or neighborhood.

For example, let’s say that there are 10 homes for sale in a city. The prices of the homes are:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

To calculate the AVERAGE PRICE, we would add up the prices of these 10 homes and divide by 10:

($250,000 + $275,000 + $285,000 + $300,000 + $315,000 + $300,000 + $500,000 + $550,000 + $600,000 + $1,200,000) / 10 = $457,000

We’ve calculated that the AVERAGE PRICE in this city is $457,000.

So how is that different from the MEDIAN PRICE?

The MEDIAN PRICE is “the number in the middle.” To find the MEDIAN PRICE, you simply to put the values in order from lowest to highest, and then find the number that is exactly in the middle. Using our same 10 properties for sale:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

We can divide the 10 properties into two equal groups:

$250,000
$275,000
$285,000
$300,000
$300,000

$315,000
$500,000
$550,000
$600,000
$1,200,000

So the MEDIAN PRICE is somewhere between $300,000 and $315,000.

To calculate the MEDIAN PRICE, you just take the two values in the middle and divide by 2:

MEDIAN PRICE = ($300,000 + $315,000) / 2 = $307,000

So here we’ve calculated that the MEDIAN HOME PRICE in this city is $307,000. As you can see, this is very different from the Average Home Price of $457,000.

This is an important distinction to make because the AVERAGE PRICE in this city is greatly influenced by the one expensive home at the top of the market selling for $1,200,000. But, the MEDIAN PRICE is just an even count of how many homes are above or below the midpoint – a more accurate representation of prices in a neighborhood.

You can use the same analysis for other key statistics such as DAYS ON MARKET. Suppose that you have a couple of properties that have been on the market for an extended time. If you use AVERAGE DAYS ON MARKET, the number will be much higher than if you were to calculate the MEDIAN DAYS ON MARKET.

Here’s a specific example:

What if you’re working with a buyer that can afford up to $325,000 for a home? If you use the AVERAGE PRICE of $457,000 for the neighborhood, it appears that that area might be too expensive for the buyer. But, if you use the MEDIAN PRICE of $307,000, then this neighborhood will be right in the buyer’s zone.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

research provided by Altos Research

In reporting a number of key real estate market statistics, there two statistical measures – MEDIAN and AVERAGE – that can be confusing to understand sometimes. Let’s take a minute to explain the difference.

AVERAGE is the term that is used more frequently in newspapers and on TV, but MEDIAN PRICE are usually a more accurate way to look at home prices in a city or neighborhood.

For example, let’s say that there are 10 homes for sale in a city. The prices of the homes are:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

To calculate the AVERAGE PRICE, we would add up the prices of these 10 homes and divide by 10:

($250,000 + $275,000 + $285,000 + $300,000 + $315,000 + $300,000 + $500,000 + $550,000 + $600,000 + $1,200,000) / 10 = $457,000

We’ve calculated that the AVERAGE PRICE in this city is $457,000.

So how is that different from the MEDIAN PRICE?

The MEDIAN PRICE is “the number in the middle.” To find the MEDIAN PRICE, you simply to put the values in order from lowest to highest, and then find the number that is exactly in the middle. Using our same 10 properties for sale:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

We can divide the 10 properties into two equal groups:

$250,000
$275,000
$285,000
$300,000
$300,000

$315,000
$500,000
$550,000
$600,000
$1,200,000

So the MEDIAN PRICE is somewhere between $300,000 and $315,000.

To calculate the MEDIAN PRICE, you just take the two values in the middle and divide by 2:

MEDIAN PRICE = ($300,000 + $315,000) / 2 = $307,000

So here we’ve calculated that the MEDIAN HOME PRICE in this city is $307,000. As you can see, this is very different from the Average Home Price of $457,000.

This is an important distinction to make because the AVERAGE PRICE in this city is greatly influenced by the one expensive home at the top of the market selling for $1,200,000. But, the MEDIAN PRICE is just an even count of how many homes are above or below the midpoint – a more accurate representation of prices in a neighborhood.

You can use the same analysis for other key statistics such as DAYS ON MARKET. Suppose that you have a couple of properties that have been on the market for an extended time. If you use AVERAGE DAYS ON MARKET, the number will be much higher than if you were to calculate the MEDIAN DAYS ON MARKET.

Here’s a specific example:

What if you’re working with a buyer that can afford up to $325,000 for a home? If you use the AVERAGE PRICE of $457,000 for the neighborhood, it appears that that area might be too expensive for the buyer. But, if you use the MEDIAN PRICE of $307,000, then this neighborhood will be right in the buyer’s zone

In reporting a number of key real estate market statistics, there two statistical measures – MEDIAN and AVERAGE – that can be confusing to understand sometimes. Let’s take a minute to explain the difference.

AVERAGE is the term that is used more frequently in newspapers and on TV, but MEDIAN PRICE are usually a more accurate way to look at home prices in a city or neighborhood.

For example, let’s say that there are 10 homes for sale in a city. The prices of the homes are:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

To calculate the AVERAGE PRICE, we would add up the prices of these 10 homes and divide by 10:

($250,000 + $275,000 + $285,000 + $300,000 + $315,000 + $300,000 + $500,000 + $550,000 + $600,000 + $1,200,000) / 10 = $457,000

We’ve calculated that the AVERAGE PRICE in this city is $457,000.

So how is that different from the MEDIAN PRICE?

The MEDIAN PRICE is “the number in the middle.” To find the MEDIAN PRICE, you simply to put the values in order from lowest to highest, and then find the number that is exactly in the middle. Using our same 10 properties for sale:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

We can divide the 10 properties into two equal groups:

$250,000
$275,000
$285,000
$300,000
$300,000

$315,000
$500,000
$550,000
$600,000
$1,200,000

So the MEDIAN PRICE is somewhere between $300,000 and $315,000.

To calculate the MEDIAN PRICE, you just take the two values in the middle and divide by 2:

MEDIAN PRICE = ($300,000 + $315,000) / 2 = $307,000

So here we’ve calculated that the MEDIAN HOME PRICE in this city is $307,000. As you can see, this is very different from the Average Home Price of $457,000.

This is an important distinction to make because the AVERAGE PRICE in this city is greatly influenced by the one expensive home at the top of the market selling for $1,200,000. But, the MEDIAN PRICE is just an even count of how many homes are above or below the midpoint – a more accurate representation of prices in a neighborhood.

You can use the same analysis for other key statistics such as DAYS ON MARKET. Suppose that you have a couple of properties that have been on the market for an extended time. If you use AVERAGE DAYS ON MARKET, the number will be much higher than if you were to calculate the MEDIAN DAYS ON MARKET.

Here’s a specific example:

What if you’re working with a buyer that can afford up to $325,000 for a home? If you use the AVERAGE PRICE of $457,000 for the neighborhood, it appears that that area might be too expensive for the buyer. But, if you use the MEDIAN PRICE of $307,000, then this neighborhood will be right in the buyer’s zone

In reporting a number of key real estate market statistics, there two statistical measures – MEDIAN and AVERAGE – that can be confusing to understand sometimes. Let’s take a minute to explain the difference.

AVERAGE is the term that is used more frequently in newspapers and on TV, but MEDIAN PRICE are usually a more accurate way to look at home prices in a city or neighborhood.

For example, let’s say that there are 10 homes for sale in a city. The prices of the homes are:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

To calculate the AVERAGE PRICE, we would add up the prices of these 10 homes and divide by 10:

($250,000 + $275,000 + $285,000 + $300,000 + $315,000 + $300,000 + $500,000 + $550,000 + $600,000 + $1,200,000) / 10 = $457,000

We’ve calculated that the AVERAGE PRICE in this city is $457,000.

So how is that different from the MEDIAN PRICE?

The MEDIAN PRICE is “the number in the middle.” To find the MEDIAN PRICE, you simply to put the values in order from lowest to highest, and then find the number that is exactly in the middle. Using our same 10 properties for sale:

$250,000
$275,000
$285,000
$300,000
$300,000
$315,000
$500,000
$550,000
$600,000
$1,200,000

We can divide the 10 properties into two equal groups:

$250,000
$275,000
$285,000
$300,000
$300,000

$315,000
$500,000
$550,000
$600,000
$1,200,000

So the MEDIAN PRICE is somewhere between $300,000 and $315,000.

To calculate the MEDIAN PRICE, you just take the two values in the middle and divide by 2:

MEDIAN PRICE = ($300,000 + $315,000) / 2 = $307,000

So here we’ve calculated that the MEDIAN HOME PRICE in this city is $307,000. As you can see, this is very different from the Average Home Price of $457,000.

This is an important distinction to make because the AVERAGE PRICE in this city is greatly influenced by the one expensive home at the top of the market selling for $1,200,000. But, the MEDIAN PRICE is just an even count of how many homes are above or below the midpoint – a more accurate representation of prices in a neighborhood.

You can use the same analysis for other key statistics such as DAYS ON MARKET. Suppose that you have a couple of properties that have been on the market for an extended time. If you use AVERAGE DAYS ON MARKET, the number will be much higher than if you were to calculate the MEDIAN DAYS ON MARKET.

Here’s a specific example:

What if you’re working with a buyer that can afford up to $325,000 for a home? If you use the AVERAGE PRICE of $457,000 for the neighborhood, it appears that that area might be too expensive for the buyer. But, if you use the MEDIAN PRICE of $307,000, then this neighborhood will be right in the buyer’s zone.

In the Altos Research reports and AltosCharts, we provide both AVERAGE and MEDIAN statistics so that you can see how these differ in every market that we cover.