This title is way too wonky but I found it hard to pare down. It’s easier to explain visually.
When I complete my research for Douglas Elliman in a particular housing market and the percent change in the overall median sales price doesn’t fall within the individual submarkets like averages do, I periodically receive inquiries from media outlets or real estate professionals to clarify. Many people see median sales price much like they see average sales price: proportional.
In this case, the median sales price change for resale to new development ranged from -23% to +1.9% yet the overall median increased 9.3…clearly outside of the range both submarkets established.
So I whipped up the following infographic with sample sales transactions and applied median and average sales price to illustrate how median sales price percent change for the overall market might not always fall within the individual submarket percent price changes. However, in an “average” analysis, the overall result will always fall within the range of the submarkets.
I hope the following color-coded breakdown below helps illustrate this clearly – be sure to click on the image once to expand or a second time for the extra large version.