Category Archives: Real Estate

What does Average vs. Median Home Price Mean?

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At my office the other day, we were talking about whether a person should look at the median or the average when it comes to home prices and getting a clearer understanding of the market. I remembered back when I had to educate myself about what those two different terms meant. I had learned their definitions in college, but I had forgotten their meanings from disuse. Here is what I learned as I refreshed my memory. 

What is an “average” home price?

Finding the average price of a home in an area goes like this. Say you have 101 houses, all at different prices. You put the prices in a spreadsheet, and add the total of all of the prices together, then divide it by 101. That gives you an average price over the whole spread of homes. 

What is a “median” home price? 

On the other hand, if you want a median price, let’s take those same 101 houses and line them up from the least expensive to the most expensive. The median is the price of house number 51 in the lineup—the very middle house. 

For an even simpler way to view this, look at the image below.

In this image, you can see that if you add 1+2+3+4+5 = 15, and then if you divide it by five (the number of houses you are comparing) you get three. For the median, you just line them up, and the middle one is three. This image is definitely an oversimplification, but hopefully it helps see what each statistical method is doing.

When I look at statistics on housing, I prefer to use the median, and here is why. If there are a 101 people buying a home, I am curious about what is in the middle of that situation. There are equal numbers of homes on both sides of that middle. One thing about the average is that if there are a large number of luxury homes in a market (as with Washington County, Utah) those home prices can pull up the average by virtue of the higher values of the more expensive homes. If we get a big enough number of those expensive properties, we see averages that look much higher than many homes are actually priced. 

Occasionally it’s good to watch the average, too, though. For example, in a shifting market we can watch trends. If the average gets closer to the median, that could be a sign of shifting prices from higher to the middle or lower. So which one should you look at first? For me, I usually look at the median. Really, it’s up to you, and hopefully these median v. average notes have helped a little as you decide which to use.

Buying a Newly Built Home

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Today I want to talk about the process of buying a new home. There are a few different stages at which you can write a contract on a new home. You may decide to build a custom home right after purchasing a lot. You may find a “spec” home that is partially built, and in that instance you get to choose some of the finishes, depending on what has been ordered and installed by the builder. Right now, in 2022, we are finally seeing builders able to finish homes before people buy them.

In the Southern Utah market it has been harder to find finished homes until just this year when the Covid-19 surge in demand finally slowed down. But even when a home is brand new, there are a few things that need to happen in order for a buyer to move in, so my purpose here is to go through those in detail.

Who says the home is finished? Well, that’s the builder. Builders will complete the home, and then they let a couple different people know. They tell the city, and then the city will come and inspect. If the city inspector finds that the home is up to building code, they give it a certificate of occupancy, referred to as a “C of O,” stating that the home is ready for someone to live there.

The next person the builder tells the home is done is the buyer. The realtor already knows the home is done because she has been over there checking on the house regularly, but she may have waited for the builder to say he has the C of O to tell her clients, because until the city says so, the home can’t be lived in. Once the buyer knows the home is ready to close, there will usually be a buyer review of the home. The buyer can look for anything that may have been overlooked by the builder or inspector, and they usually create a “punch list.” This list needs to be done in conjunction with the builder so they know what needs to be completed. Once the punch list items are completed, the buyer can close on the home.

Pitfalls to Avoid Before Closing a New Home

One challenge I have often seen is that buyers are usually ready to move in as soon as the Certificate of Occupancy is given. This puts a lot of pressure on everyone to get the purchase of the home closed. While under this pressure, it’s important to remember that once the builder has his money, his motivation to finish the punch list is significantly decreased. From a buyer’s perspective, it’s better if you can reign in that enthusiasm to close, and wait to sign documents until the home is in the condition you expect.

On occasion there may be an item that takes longer than the one to two weeks you are willing to wait to complete. If that is the case, you as a buyer can ask the seller to withhold money from your purchase in the event that the lingering punch list items are not done in a timely manner. If that happens, the money can be released to you to complete the items on your own.

Ready to Close?

If all goes well, and both buyer and seller are ready to close, the last few steps can be seen in the illustration above. The buyers bring any monies they have to the title company. If the buyer is using a loan, the lender likewise delivers. Both parties sign paperwork for the sale, and once the paperwork is all correct and the loan is funded, the title company will record the transaction with the county. Once the sale is recorded, the buyer gets the keys to their new home. And then they live happily every after. Or at least for 12 years, which is the “shelf life” of a new home, according to the real estate school I attended.

You Are Just as Smart as You Ever Were

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IMG_5444Lately I have had a mighty struggle about what I want to do with my life. I got my realtor’s license last fall after coordinating a team of realtors for about a year and a half. I loved what I did as a coordinator, and I am learning to love the new things I am doing, too.

The truth is, I’m a little introverted, so some of the things realtors do are harder for me than I wish they were. I’ve wondered if this is the right path. I worked so hard to get here. School took almost a year of studying at night, weekends, and any time I could tightly squeeze it in between my four kids, work, and church stuff. At one point I gave up, thinking I’d never be able to finish my realtor schooling because of the health problems I was facing.

Then I got my health managed, and by early last fall found myself taking the real estate exam. I got my license, and began practicing real estate. My first year has been a challenge, with ups and downs. I haven’t been sure if this is what I want to do with my life.

I have unloaded on my dear partner more times than I care to admit. I love my team and office so much. I have had terrific clients so far, and the more experience I get, the more capable I feel of helping people through whatever happens in a transaction.

I’m pushing 40, and maybe it’s a mid life crisis, but I kept questioning if this is the right path for me. I couldn’t decide if I wanted to change careers again. I have worked in a building supply store, a doctor’s office, a youth treatment facility, and as a writer and photographer, and I’m just starting to feel old. I feel like I can’t keep jumping around like this anymore.

One night a few weeks ago, Alex said something profound to me. He had said this to me in different ways, but he looked at me, put his hands on my shoulders and said, “You are just as smart as you ever were.” He waited for it to sink in. For months I had been questioning if I could do anything else, if I could do this, or if I had lost the possibilities I always believed in when I was younger. For months he had reassured me that I can do anything I set my mind to do.

Finally, his words sank in. I realized that just because I’m older, just because my life is more complicated with work, children, and health issues, doesn’t mean I’m not still me. Someone inside of me needs to write, and I had shut her down for a long time.  When Alex said that, something switched, and I decided that I’m going to make room for writer Jenny to be part of my life.

Does this mean I have to stop being a real estate agent? For a long time I thought it might. But when I started looking into copywriting as a trade, I immediately knew that specific path was wrong. I think that Realtor Jenny and Writer Jenny are going to have to work together. And I think that because I am as smart as I ever was, I will be able to make that happen somehow.

So in this post, I am grateful that although I usually have the words, when I needed them most, Alex had the right words for me.

And just for an inspirational boost for anyone feeling like me, here is a great article from the Wall Street Journal letting us know that It’s Never Too Late to Start a Brilliant Career.