Real Estate Glossary > M > Median Definition

The center value of an ordered set of data. For a set of five homes worth $100,000, $150,000, $200,000, $250,000 and $600,000, the median value would be $200,000 and the average Averages are calculated by adding together each number in a set and dividing by the total number of values. value would be $260,000. When looking at a neighborhood's home prices, the median price is usually the best reflection of a typical price since it won't be affected by a few very expensive or cheap homes in the sample.

On Redfin, we use both averages and medians. We average all data points when calculating the ratio of the final sale price to the list price The final sale price (what a buyer pays for the home) divided by the last list price expressed as a percentage. for a neighborhood because most home-buyers want to take into account every value, even outliers. But we calculate the median $/sq. ft. The list or the sale price of the home divided by the number of square feet. for homes in an area so that a few fixer-uppers or gold-plated palaces don't distract us from the price of a typical home.