A real estate price is generally calculated based on square foot, using mean and median prices. Some countries like USA fix a price for a house; they give an average value for house. People can buy houses based on that price. In 2005 there was a median price of $213,900 on houses. This made people buy houses above and below this range. Other price is average mean price. This price is calculated based on average of all homes sold in a particular area.