Rookie here! Average Home Value vs Median Sold Price

[Ben Schein]

Hello BiggerPockets community! Just starting my journey into real estate investing, and conducting my first market analyses. One datapoint I keep getting a little hung up on = is average home value, and it's leading to two separate but related questions: how do I most effectively use or weigh this metric as part of my analysis? And I understand the difference between the average home value and median sold price, but I'm curious which people use when evaluating a market, their rationale for that decision, and how they use the metric. Thanks so much in advance for any answers!

[Cole Bossert]

Welcome to BP, I personally think median sold price is the better metric. It’s not distorted by extreme highs or lows like average home value can be. I use it to track price trends, compare to median income (affordability), and check rent-to-price ratios for cash flow.