** Which is Better? – ****Average Bozeman Home Price or Median Bozeman Home Price? – Which is Best?**

**Average** and **median **home prices in Bozeman can be **significantly different,** so it’s important to **compare average price to median price** and to** understand the differences** between these 2, **easily mastered, formulas**.

**—— Average Home Price ——**

When **looking **at Bozeman home **price statistics, average **price is often inaccurate because the area has a **small population** in comparison to, say, Billings or Boise. But this formula **can be better** in many cases.

**Average price**, aka, ** mean**, is found by simply

**adding all prices,**e.g., $50,000; $90,000, $

*150,000,*$330,000, $470,000 = $1,090,000 and then

**dividing the sum, $1,090,000,**of these numbers

**by the quantity**–5–of these numbers.

Thus, **$1,090,000 divided by 5 = $218,000**, which is the **average price.**

**Average price** often depicts wild **price swings, **throwing off your search for a **reasonable reflection** of Bozeman home prices.

**Average is better*** when **prices** are relatively **close in value**, e.g. $150,000, 158,000, 165,000, etc. But as explained above, it’s **not as accurate** a reflection of home prices **when prices are outliers**, i.e., far apart.

**—— Median Home Price ——**

Used as an numerical phrase, **median signifies a middle price in a set** of Bozeman house prices.

Frankly, using the **median price results in a better depiction** of the typical or the middle price **than using **average **price.**

To **find median** price, line up the prices, in this case 5 prices, an * odd* number, in

**order of prices**, e.g., $50,000; $90,000,

**$**

*$330,000, $470,000, and simply pick the*

**150,000**,**middle price**, so

**median**is simply

**$150,000.**

Now, if the **quantity of prices is even**–4 in this case–$50,000; $150,000, $330,000, and $470,000, there is

**no “middle” price**to take as your mean.

Therefore, you start the calculation by taking the average of the **2 middle prices: **

**$150,000 + $330,000 = $480,000, **and then **divide $480,000 by 2 = $240,000.**

Next, you **add** **$240,000 to both $50,000 and $470,000**.

So, **$240,000 + $50,000 + $470,000 = $760,000, divided** by **3** **= $253,333**

Therefore, you would use this number, **$253,333**, as your **median price.**

**—— Conclusion ——**

In conclusion, the **median** price formula is usually the more accurate of the 2, so, for the most part, **median** is **best.**

But, as mentioned above*, the **average** price formula **has its place and can be better**, depending on your **statistical need**.

**Both numbers** have their benefit in studying Bozeman home prices, so don’t rule either one out!

**Note**: If you are using **fewer than 30 home prices** in either formula, your final home price–**average** or **median**–may **not be accurate** enough to reflect your real estate market’s home prices, so look at other factors, too.