Ways to price Real estate

There are two major ways in which aggregate home prices are reported median and mean (average). Prices are also calculated by square foot, using both the mean and median price. Real estate prices have had a profound impact on urban, as well as the suburban and rural landscape. The most important government measurement of home prices in the United States is the house price index. Median house prices are reported for metro areas and regions of the nation by private National Association of Realtors.

Median home price

The median home price is the threshold which divides the real estate market into two equal halves, in reference to pricing. One half of all homes in the market are priced above the median home price, while the other half are priced below it.

Mean (average) home price
The mean home price, or average home price is the sum of all home prices in a certain area, divided by the number of properties in the same area.

Per square foot pricing
In per square foot pricing, the total price or rent of a unit is divided by the square footage of the unit.

Rent per square foot
Rent is also calculated by square foot. The rent per square foot is often used as an effective tool in comparing tenements and different markets, when units of different sizes.

Some Factors Influencing Real Estate Prices
The variables that drive residential real estate prices can be grouped into macro forces and micro forces. Real estate prices can have a profound impact on an area. They can cause urban decay, over crowding as well as an urban renaissance.

Affect of price.
Decline
Urban decline can cause house prices to collapse. This trend can be caused by largely caused by suburban migration. Lower real estate prices had a negative effect on landlords, who in these declining neighborhoods became known as "slumlords." Slumlords are notorious for not caring for the properties and letting them slip into severe disrepair. Often landlords in blighted urban areas do not have funds to care for unprofitable properties.

Overcrowding
In many areas rising real estate prices have had an adverse effect as well. Causing overcrowding.

Urban Renaissance
In some areas, rising home prices have caused an urban renaissance. Rising home prices can transform unprofitable and decaying properties into potential gold mines.

Real estate Index