Frequently Asked Questions

- Inventory – Answers this question: How many months will it take to sell the active listings based on the current rate of sale?
- Active – An active listing is real estate that is open for offers.
- Pending – An offer has been accepted and the sale closing date is set.
- Boxplot – Often called a box-and-whisker plot: A
**Box Plot**is a graphical representation of a five number summary. The ends of the “box” are the first and third quartiles, with the median inside the “box”. Points are used to represent the maximum and minimum value, with lines (called whiskers) connecting the points to the box. Outliers are shown as dots beyond the ends of the whiskers. See Wikipedia and if you want even more take a look here. - Mean is the statistical word for average. It is calculated by adding up all the numbers and dividing by the number of numbers. For sale prices, 50% of the value is on each side of the mean or average. If you had the same size coins representing the value of the numbers, say you bought and sold houses using quarters, then there would be equal numbers of quarters on each side of the mean.
- Median is the center number. To find it: put all the numbers in numerical order and find the middle number (or average the middle 2 numbers, if there is no middle number). 50% of the numbers are on each side of the median. If you have a sales receipt for each number, then there would be just as many receipts on each side of the median.
- Mode is the number that occurs most frequently. Sometimes in real estate statistics we will round prices off to the nearest 5k or 10k for mode calculations.
- Mean (average), median and mode are measures of center for the data set.
- What does it mean (ha, ha) when the median is lower than the mean (average)? In statistics it usually means the distribution has a positive skew (skewed to the right). It means there are more data points below the mean. This happens when a few numbers are relatively larger to pull the mean toward the right.
- Do you really need to use the words “linear regression”?? Since you asked – it is a straight (linear) line that “fits” the data. In theory, you can extend it to “predict” future values. In reality, this may or may not turn out be true.
- I often see in the graph a curvy line and/or a straight line – what are these lines? The graph is usually points or a jagged line showing the plots per week, month, year, or something. The curvy line is a “smooth fit” line that tries to follow the plot. The straight line is a linear regression that tries to show the trend of the data. The shaded area surrounding the line is the 95% confidence area.
- The quartiles are the quantiles that divide the distribution into 4 equal parts. The second quartile is the median.