Median House Prices

What effects the median house prices

The type of things that can affect your house price are going to be directly or indirectly related to how your neighbourhood or suburb is perceived by potential buyers for your area.

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The biggest factors that affect buyers in purchasing in a particular area are the obvious ones below

• Employment in the area
• Facilities in area such as Schools, leisure areas parks and shopping centres
• Transport infrasructure, availability of public transport
• What your neighbours are doing, for example a lot of new homes being built in suburb will force average prices up
• New infrasructure can be a wild card and a new development prosped for your area can have a positive or negative affect on house prices in your suburb depending on what the development is

Note that the price of this so called typical house in the media is not the same as the average price of a house

In fact the average house price will tend to be higher than the price of the 'typical' house, since it's more heavily influenced by a small number of very expensive properties. If you remember your maths from school, the 'mix-adjusted', typical price is more like a median price than a mean price.

The simple option with averages, of everything in your data sample. This has the advantage of transparency, but the mix of properties might change between reporting periods. So you might get a load of expensive mansions selling in one period and a preponderance of cheap houses in the next. You'd get a falling average price, but it would be very misleading.

Simple averages tend to get more reliable as the amount of data increases, since the chance of a significant change in mix is reduced. The trend shown by data for individual post code areas, where there may only be a handful of sales in a particular period, will be very unreliable.

In an attempt to overcome the problem of a changing mix, some surveys, have developed a 'mix-adjusted' price. This is designed to represent the changing price of a 'typical' property.

Each transaction in the survey is labelled with a price and a series of defining characteristics such as location, type of property, floor size, number of bathrooms, number of bedrooms and so on.

This data is then fed into a computer that spits out the price of a house with a particular set of characteristics that are thought to make it 'typical'.

Seasons will also affect quotes on median house prices

The spring and summer tend to produce slightly higher prices than the rest of the year because, the perception is that there are more buyers and hence sellers do not have to discount their prices so heavily, in order to achieve a sale'.

Some surveys tweak their prices according to the time of year, to produce a seasonally-adjusted price. This should give a clearer picture if you're looking for the overall trend in prices over the last few years but happen to do so in the depths of winter.

Just remember if you ever think " i should sell because my house price has gone up so much " you have to live somewhere and if you are repurchasing in a similar area or similar marketplace there is a big chance prices in the neighbourhood where you want to purchase will have also risen.