Did the Calgary Real Estate Market Go Up or Down?

Are Values Increasing or Decreasing in Calgary?

I was reading through the Calgary Real Estate Boards stats and reports from September 2010 and noticed something very interesting...

The report said the following:

The average price of a single family home in the city of Calgary in September 2010 was $460,278, showing a 3 per cent increase from August 2010, when the average price was $445,617 all the while, the median price of a single family home in the city of Calgary for September 2010 was $390,000, showing a 1 per cent decrease from August 2010 when the median price was 395,000.

How is it possible that the market can go up and down at the same time... Let's dig into this and understand why it's important to go look at the median prices versus the average prices.

In the month of August there were a total of 25 properties that sold over the $1 Million mark. Considering August was a slow month, this is great... Out of those 25 homes there were only 2 properties that were above the $2 Million price point, $2.3 Mill and $2.6 Mill.

In the month of September 2010 there were a total of 34 properties over the $1 Million mark. This is a big jump from August. Along with the increased number of transactions, the price point was also much higher... There were 4 transactions that were in the $2 Million price point along with one that sold for $3.5 Million.

So, when the report said that the prices in Calgary went up and the media reported the same, Calgarians were lead to believe that the real estate market in Calgary was on the upswing. When in reality and when you pull back the curtain, you will see that the prices in Calgary actually declined from the month before. The median of a range of numbers is determined by ordering all numbers from beginning to end and picking the middle one, or in the case of real estate, the sale prices for that month. On the other hand, the average sale price, where you'd add all the numbers up (or sale prices) and divide by number of sales, gives us the average price.

When you use the median to look at the real estate market values in Calgary, this will take out the super high values and the low values and give us a true indication of what has happened.

So, in saying all this... Did the market go up or down? What do you think?