Median vs. Average Home Price in Seattle: Which to Trust
Median and average home prices can move in opposite directions in the same month. One tiny worked dataset shows why — and which number to use when.
In the same month, the average Seattle sale price can rise while the median falls. Neither number is wrong. They’re answering different questions, and unless you know which question each answers, every headline about “Seattle home prices” is a coin flip.
This whole post runs on one tiny, clearly illustrative dataset. Five sales close in a neighborhood this month:
$650,000 · $720,000 · $780,000 · $850,000 · $3,400,000
The two calculations
Average (mean): add them up, divide by five. Total is $6,400,000, so the average is $1,280,000.
Median: sort them, take the middle one. The median is $780,000.
Four of the five buyers paid under $900k, yet the “average home” cost $1.28M. One waterfront sale dragged the mean up by half a million dollars. That’s the core asymmetry: the average is sensitive to extreme values; the median only cares about the middle of the pack. Home prices have a long right tail — there’s a floor near zero but no ceiling — so the average almost always sits above the median, and luxury closings whip it around month to month.
This is why nearly every housing report you’ll see for King County leads with the median. For “what does a typical home cost here?”, the median is simply the better tool.
But the median has its own failure mode: mix
Now re-run the month with a twist. Same neighborhood, same five houses worth exactly what they were — but this month the $3.4M home doesn’t trade, and two new townhomes close at $600,000 and $620,000 instead:
$600,000 · $620,000 · $650,000 · $720,000 · $780,000 · $850,000
The median is now $685,000 (midpoint of $650k and $720k). It “fell” from $780k — a scary-looking drop — while not a single home in the neighborhood lost value. What sold changed, not what homes are worth. Statisticians call this a mix shift, and Seattle is unusually prone to it:
- Townhome/single-family blending. New townhome deliveries cluster in specific neighborhoods and specific months. A batch of closings pulls the area median down mechanically.
- Luxury seasonality. High-end Eastside and waterfront sales are lumpy and seasonal; their presence or absence moves county averages a lot and medians a little.
- Rate-driven composition. When mortgage rates move, the first buyers to step back are often at specific price tiers, changing the mix of what closes.
Repeat-sales indexes were invented precisely to strip mix effects out — that’s the subject of Case-Shiller vs. MLS data.
Small areas make everything worse
Five sales was a convenient teaching size, but it’s also realistically what some Seattle micro-neighborhoods close in a slow month. With samples that small, both statistics are noise. A single unusual sale moves the median a full slot. Treat any neighborhood-level “median price is up X%” claim built on a handful of sales as anecdote, not data — the same small-n problem that wrecks absorption rate at the micro-market level.
How to actually use these numbers
- Default to the median for “what do homes cost here” questions, at the county or city level.
- Check the sample size before trusting any neighborhood figure. Dozens of sales, fine; a handful, ignore it.
- Look at year-over-year, not month-over-month, to dodge seasonal mix swings.
- When median and average diverge sharply, read it as information about the top of the market: average rising faster than median usually means the luxury tier is active.
- Never price a specific home off either one. That’s what comps and a CMA are for.
A buyer or seller who understands the median is harder to spin — and one who can see what agents charge is harder still. Manaky Homes is building a free marketplace where Greater Seattle agents publish their fees openly; join the waitlist to browse them when it opens.
