The myth of Average Prices

Are you confused about the mixed messages about “average prices”?

How can prices be up, when they are obviously lower?

What the heck is an average home?

What is an average neighbourhood?

What does average mean?

Who coined the term average?

Let’s take a look at how average prices are calculated.

 Let’s say 10 houses sell for $300,000. It is pretty obvious that the average price will be $300,000. In fact, we can say that this is an actual value.

Here is where the fun starts…..

The next month, 8 more houses sell for $300,000, and 2 more, larger houses sell for $500,000.

 Wow! Our new average price rockets to $340,000! Looks like a real estate boom…Right?The next month, an Investor puts 5 poorly maintained rental houses on the market and sells them for $250,000 each.

 2 others sell their houses for $320,000 (prices are up remember?) and 3 smaller houses sell for $200,000 each.

  Uh oh….looks like prices are down? The average price plummets to $240,000! It’s a Recession…the sky is falling!

 See what I mean? There are too many factors to consider here, to jump to conclusions about anything. As you have likely heard through the media and co-workers, there are indeed a large number of properties to choose from. In fact, in 20 years of selling real estate, I don’t think we have had this kind of selection in a long time! If you have been on the fence, this may be a great time to think about making the move…but do it right…interview a couple of realtors before selecting one. See my other comments on the “more” tab above.

 Warning….I tend to take a tongue in cheek view of the world when it comes to real estate. You will need a sense of humour. This is a mandatory requirement when it comes to doing business with me.

Why do I need to work with a Realtor???

I work with many qualified mortgage professionals, lawyers, contractors and the like. I have bought and sold my own properties, renovated, held them, and sold some. Yes, I have seen the good and bad side of real estate. Experience is the best teacher. Click on the "more" tab to see the other side of what a good Realtor can do for you... 
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