How to Calculate a “Real” Average Price: Median vs Mean

Why the choice of "average" matters 🏡

When you look at property prices, people often say "the average price"—but which average? Mean (arithmetic average) and median tell different stories. Choosing the wrong one can mislead buyers or investors, especially in markets with a few very expensive properties or wide price dispersion.

Quick definitions

• Mean (arithmetic average): total of all prices divided by the number of properties. Useful in evenly distributed datasets.
• Median: the middle value that splits the dataset in half. It is robust to outliers.

Example to illustrate: if most apartments are clustered around a certain price but a small number are much pricier, the mean will be pulled up while the median stays near the typical market level.

When median is more useful ✅

• Small sample sizes or markets with some luxury outliers.
• When you need to know the typical price a buyer should expect in a neighborhood.
• For fair comparison between areas or building types.

Median shows the central tendency of typical offers without distortion from rare high-end sales.

When mean is relevant ⚖️

• For assessing the total monetary flow in a market or segments (for example, luxury development potential).
• When evaluating the influence of high-value transactions.

Be aware: mean is sensitive to outliers and may not reflect what typical buyers pay.

Practical method for buyers and investors 🔎

1. Collect comparable listings in the area: size, condition, floor, distance to the sea or center.
2. Calculate both median and mean for similar units.
3. Check the gap between median and mean. A large gap indicates skewed distribution.
4. Use range and interquartile range (25–75%) to see where most offers are concentrated.
5. In negotiations, cite median to argue a typical market price; use mean if you want to emphasize potential value from high-end comparables.

Negotiation phrases you can use 🗨️

• As a buyer: "Based on the median for similar units nearby, this asking price appears above the typical level."
• As a seller: "Recent higher sales in the area lift the mean, reflecting premium demand for well-located or renovated units."

Segment the market for clearer insight

Split listings by condition: turnkey, needs renovation, new build, resale. Aggregating all segments into one average may hide meaningful differences between them.

Quick checklist before making an offer ✅

• Compare median and mean in your target neighborhood.
• Assess price dispersion—high spread means do more inspection and due diligence.
• Check how many comparable transactions exist recently—small samples reduce reliability.

Final practical advice from BuyHome 🤝

Use median to understand typical market price and mean to grasp overall monetary dynamics. Combine metrics, segment the market by quality, and base negotiations on solid comparable data.

If you want, we can prepare a tailored analysis of median and mean for the neighborhoods you consider in Batumi or across Georgia and help you build a negotiation strategy. Contact us for help choosing property.

See property listings: https://buyhome.ge/en/search