July 5, 2019

The Flaw of Averages

Since the moment we enter this world, we are compared and geared towards average based on a belief that an average tells us what is normal so that we can conform and lean into what is expected. The very first thing that happens with a new born, even before it is placed in its mother’s arms is to be weighed and measured then carefully plotted against and average. Most new parents become very familiar with the world ‘percentile’ as you learn about how your child is growing or developing against other babies, and the elusive ‘average’ baby.

This continues for that infant as they enter schooling, sports teams, the workforce, and the neighbourhood with social comparison theory dictating self worth to us through the deviation we perceive or record from ‘average’. It is no wonder that comparing ourselves to the Jones’, or the Kardashians even, is a cause of such misery – when you consider how flawed the idea of ‘average’ is.

The weirdos are the ones who achieve above average. Einstein didn’t speak until he was four years old, and was considered a child of below average intelligence. That ceiling put him to work as a clerk and it was his hobby of astrophysics – the weirdness he indulged himself that enabled him to resist his ‘averageness’ and leave a very-much-not-average legacy that has and will inform scientific thought for generations.

The ‘Law of Averages’ as traditional wisdom is, on average, more often wrong than right and has come to be affectionately referred to by data scientists and business leaders as the “FLAW of averages’. In our ‘quest’ for certainty and to help the work makes sense for us to put in boxes, put in putting life into boxes, we put a ceiling and a floor on the possibilities, and paint ourselves into a corner that isn’t there.

Where we use averages to try to understand or predict what is normal, we mislead ourselves into a simple paradigm. As real estate agents, we are asked what the ‘average’ house sells for all the time. All. The. Time. And yet here is the thing. The ‘average’ house doesn’t exist. Even in a development of homogenous housing stock, there is a variation on price because of the way that houses face, where they are positioned in a row, breezes, access to visitor parking – there are so many variables. And just like you can never step into the same river twice, as the buyers move in and out of the market, there is fluctuation in the demand and level of finance in the marketplace and so all of these factors are carefully weighted when we give our professional opinion on market price.

The variation and complexity, as well as the human drivers of demand including the Hemsworth factor, will all impact the amount of funding that is available for a particular property. It is why agents connected to the buying cohort and who are curbside and in lounge rooms will always have a much better feel for the ‘price’ of a property than an automatic valuation. The levers are sometimes more important than the machine.

And it is funny because when people ask us about the average home price, I think the question they are really wanting to know is what is an above average home price. No one wants to sell for an average price and no one wants to buy an average house in an average area. We are aspirational by nature and so the lifelong gearing of our minds and bodies to ‘average’ and ‘normal’ is something we can all probably recognise as redundant.

Your house, it’s quirks, its story, its features, the location, its dimensions, the aspect, the fashion, the vibe – all of these factors converge to create a unique value proposition in the property. We don’t strive to sell average homes for average prices to average people – we are storytellers and we gear marketing, negotiations and service away from average and towards amazing.