A recent newspaper article in California said the median price of a single-family home sold in the past year is in the local area was $450,000 and the mean price was $470,000.
Which do you think us more useful to someone considering the purchase of a home, the median or the mean? Why?
The median and mean tell a home buyer different things.
Consider this example,
- You live in a town of 1000 residents who are all earning roughly $80,000 per year.
- To keep it simple, the median and the mean are roughly $80,000 give or take.
- Your town is real nice and reminds Warren Buffet of his ...