A friend pointed me to a good article on the buoyant real-estate market in Boston (link). The journalist tells us the median home sale price in Suffolk County has gone up 31 percent in the five years since the 2010 crash.
The article makes some excellent points. When it comes to talking about median house prices, it fails basic statistics.
Here is a quote (maybe a misquote) from Barry Bluestone, whom the reporter describes as a "go-to mind" on Boston housing. He complains that "median home sale prices--the metric by which many people judge the market--can be misleading." How so?
He explains: "If a bunch of expensive homes sell all at once, it will appear like median prices have risen rapidly. And if a bunch of lower-priced homes have hit the market recently, the opposite will be true."
That is a strange thing to say. The whole point of using median prices, as opposed to average prices, is that the median--as it depends only on the ranking of prices, not the actual prices themselves--is not easily affected by a few extreme values.
Perhaps he is computing the median prices on a very small sample, such as the sales of homes in a local district within a short period of time. If that is the case, if he only has a handful of prices, then the problem is not which statistic but the sample size.
In addition, the median price is a one-number summary of a list of individual prices. So I must quibble with the use of the plural in this sentence: "median home sales prices in Suffolk County are up more than 31 percent..." If the reporter gets how the median is computed, he would have chosen the singular verb.