What's in it for me?

This article is reprinted from Wine Country Real Estate, a special advertising section of The Press Democrat.

Our world is complex on so many levels and all at the same time. As you are besieged with media dribble 24/7 about unrest in the Middle East, planes falling out of the sky in Germany, the Kardashian's newest drama or even what your favorite sports team is doing you have to sift through the stories to find the relevant value. Much like the complexities of understanding what changes in the marketplace impact your family and your well-being, attempting to decipher macro real estate information in a micro world can prove challenging.

One of the most common components of a detailed evaluation is typically referencing what the average price of a home is in a specific niche of the market whereby the calculation is based upon recent sales of similar homes in a similar area. Taking into account the difference between average and median valuations is very relevant. Either can be utilized in tracking or arriving at broad market valuations, but average may be more so as it may paint a clearer picture of the overall composition of a sub-market, thereby allowing both buyers and sellers to have a more realistic interpretation of a specific market as opposed to the median which may be more aloof and only designates a mid-point between which all homes used in the sample are transacting at.

A current macro overview of the North Bay region of Sonoma, Marin and Napa counties indicates a median price of $684,000 whereas the same reported an average of $937,000 for a single family home - a 37 percent difference. This critical distance between the valuations means you must truly lean on your trusted advisor to better understand what the real market value is for a particular home.

Sonoma County has seen growth in both these metrics. In February of 2014, as the markets were coming out of their winter slumber, the median value for a single-family home rested at $449,000 while the average indicated $546,000. According to data collected by BAREIS MLS, by the end of February 2015, Sonoma County saw this number escalate to $492,000 as the reported median versus $606,000 as the average price paid. These discrepancies can be confusing to most consumers in trying to evaluate the accuracy of a particular property.

Within the borders of Sonoma County, Windsor's median price sunk to $487,000 in February while the average price paid shot up to $619,000 – a 27 percent difference from one metric to the other. Sebastopol checked in with a median value of $660,000 versus an average value for each home sold during the month of $942,000 – a 42 percent discrepancy. Similarly, the Westside of Petaluma compiled a median of $601,000 while the average deal tipped the scales at $749,000 – a variation of 25 percent. Elsewhere in the county, Northeast Santa Rosa recorded a median of $582,000 while the average transaction was $672,000, coastal Sonoma's median slipped to $573,000 while the average sale steadied at $652,000 and the tony town of Healdsburg recorded a median price of $698,000 with the average property changing hands at $923,000 – a 32 percent gap between valuation models.

In Marin County, the median value closed February at $1,015,000 while the average price of a home sold was soundly up to $1,376,000 - a hearty 36 percent variation between metrics. Mill Valley and San Rafael checked in with the most dramatic differences as their medians hit $1,400,000 and $797,000, respectively, while the average sale came in at $1,769,000 and $913,000 – showcasing discrepancies of 26 and 15 percent in each sub-market between metrics. Novato witnessed its' median rise to $850,000 with the average deal closing for $925,000.

As a whole, the Napa County market saw its median rally from a year earlier to $545,000 as the average transaction value climbed to $828,000. With the county's markets favoring sellers, the city of Napa saw its median rise to $589,000 while the average property sold for $824,000 – both significantly higher than a year ago and indicating a substantial 40 percent variation in the valuation between methodologies. At the extreme south end of the county, American Canyon closed February with a median value of $350,000 while the average price posted for a home rose to $360,000 – both actually lower than the prior year while more smaller homes transacted during the month as indicated by the price-per-square-foot jumping to $215.

The median clearly indicates less volatile differences than the average but may truly miss the mark on what a realistic price is for any given property. In trying to compile the most relevant components in your own story be open to approaching your path from various data points, thereby unlocking your own truth in valuing real property.