The Question: How is Median Sales Price (MSP) calculated?
The Answer: MSP is calculated by compiling all closed sales prices in a given period (e.g., weekly, monthly, quarterly, annual) from lowest to highest — not accounting for seller concessions — and then finding the middle value.
MSP is different than an Average Sales Price (ASP), which is calculated by adding together all sale prices from a given period and dividing the sum by the total number of sales.
An important aspect of median calculations that can trip up even the most seasoned stats consumer is how product mix can produce unexpected values.
Let's say this month had 11 closed sales ranging in price from $115,000 to $300,000, while the same month last year had five sales ranging in price from $100,000 to $200,000. Although the month for this year had sales of a higher value, as illustrated below, the median (or midpoint) was lower than last year:
The volume of sale prices in a certain range can heavily impact where the median value lies in a data set.
Also note that MSP cannot always be compared between the reports and charts that we produce, since they may use different calculations (e.g., 12-month rolling, six-month rolling, monthly) and may use different data filters, geographies and property types.
Metrics calculated by ShowingTime are expected to vary from those pulled directly from the MLS. This, too, is due to a variety of factors that include data scrubbing or cleansing – where we remove obviously erroneous data points – pull dates and filters.
Although these processes can cause slight variations in data when comparing ShowingTime reports to reports created without our proprietary data methodologies, we firmly believe they illustrate a more accurate picture of the marketplace.
Do you have the market statistics you need at your fingertips?
If you're a real estate professional and belong to an MLS that subscribes* to MarketStats by ShowingTime, you already have access to useful reports and charts for every situation.
For MLS and association staff who need to quickly generate reports and charts that summarize local market activity, MarketStats by ShowingTime can help. Contact us for more information.
*MLSs and associations subscribe to MarketStats by ShowingTime to provide ready-made statistical tools for members. MarketStats is currently sold only to MLSs or associations.