Greeley Colorado has seen some incredible increases in home values over the last few years. The area has seen prices increase 15 percent or more in each of the last three years. Median prices in Greeley Colorado, were just over $100,000 in 2011, but have climbed close to $250,000 in 2016. It can be tricky finding the median value for a town, because just about every site you look at, has a different number. I want to show where I came up with my value and why I think it may be a little more accurate than some other sites like Zillow.
What is the median home value?
Before I get too deep into the numbers, I want to explain what median value means and why it is important. The median value is the middle point between a set of numbers. With house prices, you take all the houses that have sold in a given time, and the middle value is your median. If you have 100 houses sales, you list them from 1 to 100, with 1 being the cheapest and 100 being the most expensive. Number 50 on the list is the median value.
Many people look at averages when calculating prices or value. The average would simply be the average price of those 100 homes. However, using averages is not as accurate as using the median value. The problem with average values, is a couple of obscure numbers can through the entire average off. If most homes are selling for $200,000, but one house sells for $1.5 million that will greatly skew the average. Even if a really low-priced home showed up on that list at $20,000, the $1.5 million sale would skew the average $1.3 million on the high side. The median value does not get skewed by abnormalities.
What is the median value in Greeley Colorado?
I have tried looking up the median value many times, because I am a Realtor and a real estate investor. I want to know what our market is doing and where it is going so I can educate others and know for my own investments. Here are what various sites say the median value in Greeley is.
You could take the averages of those numbers to find the median value in Greeley, but I do not think that is an accurate number. The problem with the numbers that these websites produce, is it is based on many different sales that might not represent market value.
Why is the Zillow, Trulia, and Realtor.com median value not accurate?
Zillow and some of these other sites get their median values from sold properties. It would make sense that sold properties in an area would be representative of market value, except for one problem. Not every house that sells, is sold on the open market. In Colorado, ever house sale is pubic record, but you don’t always know the story behind that sale.
- Traditional sale: This occurs when a home is put on the MLS (multiple listing service) by a real estate agent and most buyers looking for the home will see it is for sale.
- For sale by owner (FSBO): A home that is sold by homeowners who do not use a real estate agent is called a FSBO. The stats show FSBO’s do not sell for as much as homes listed by agents. FSBO sales will bring down the median sales prices, because they are usually not marketed as well, may not be in the MLS and a number of other factors.
- Auction sales: Some homes are sold at the trustee auction, which is how a bank takes possession of homes that have been foreclosed on. The typical price at the trustee auction is much lower than a traditional sale. Some investors will buy houses at the trustee sale, but they cannot see inside the home, must have cash the same day they buy, and have no guarantees there are not other liens. Homes sell for 50 to 80 percent of the actual value of the home.
- Related party transactions: Many sales are conducted by friends or family. The homes are never listed for sale, but the related parties agree to a price, which is usually much less than market price.
Most people want to know what the value of their home is, if they sold it with a real estate agent on the open market. If you are looking for the traditional median sales price, you need to ignore all of these other sales types. The websites like Zillow, Trulia, and Realtor.com include these sales types when they figure the median value.
What is the median value of traditional sales in Greeley Colorado?
Since I am a real estate agent I can look at the MLS statistics to see what homes have sold for. I am able to look at every sale in a given period of time, as well as see the median value. We are in April of 2016 and here are the statistics directly from MLS for Greeley, Colorado, from January 2016 to April 1st 2016.
Number of sales: 365
Volume of sales: $92,623,598
High sales price: $1,175,000
Low sales price: $68,000
Median sales price: $243,800
Sales price to list price: 99.41 percent
These statistics show the median value is $243,800 for Greeley, much higher than the other websites. This is for the last three months of data. If we look at the last month of data, which is 147 sales, the median price is exactly $250,000.
As you can see Zillow and some of the other sites, are not very accurate when it comes to median value. If you are in an area with many foreclosure sales, it could throw values off even more. Statisticians from the MLS, will give the most accurate date for the median price of homes that are actively marketed. We will see if Greeley’s market continues to increase in value, or if it levels off in the rest of 2016.