Average spring height is the aritmetic mean of max. and min. spring hts.Min. corresponds to max. load and max. corresponds to min. load.The concept of average height is due to the consideration that the spring is loaded in between its max. and min. capacity.Now your pipe moves down.That means it was originally up when the displacement started.i.e. its installed height was more. So the addition.
Hope this answers your question.

A.Bhattacharya

Stress Analyst

Bechtel Corporation