Three Caveats — & One Big Outlier
Prices in St. Louis Park’s “first alphabet” Fern Hill neighborhood have been appreciating smartly over the years.
Which only makes sense: the high-demand neighborhood is just west of Cedar Lake; close to downtown Minneapolis and Uptown (but not too close); and has been enjoying a wave of major remodels and new construction the last decade or so.
But, given that much of the housing stock there is still older (1950’s and earlier) and smaller (under 2,000 finished square feet) — how can average sale prices possibly be that high?
Parsing the Numbers
Here’s how:
Unlike the “median” sales price, which identifies the mid-point of a list, “average” totals everything on the list, then divides by the number of items.
Here are the list prices of the seven Fern Hill homes that have sold (so far) this month:
$199,900
$265,000
$390,000
$575,000
$735,000
$749,000
$4,500,000
“Average” vs. “Median”
Per the above, the $1 million-plus ($1.059 million, actually) average sales price is explained by an outlier: a two-building property overlooking Cedar Lake that was last listed for $4.5 million.
See, “New on the Market: 2545 Huntington Ave. South in Fern Hill for $4.995(!) million.”
By contrast, the median sales price for Fern Hill for January is a much more plausible $575k (bold italicized on list above).
The three other caveats about the $1 million average price: 1) the numbers are for just one month; 2) the homes haven’t closed yet — that’s supposed to happen in February; and 3) the above statistics are based on list price.
So, the actual, closed sales prices for January are likely to be about 5% lower.
On average . . . 😉
P.S.: Excluding months with a $4.5 million sale, Fern Hill’s average home price is around low $400’s these days.
