Zillow Home Value Index: "Real" Home Value Falls to 3.5 Year Low

Zillow.com, the real estate listing and brokerage website, makes a wealth of real estate data publicly available. Of these, the Zillow Home Value Index (ZHVI) attempts to provide a seasonally adjusted measure of home values as well as market changes. Specifically, its “flagship” ZHVI uses data for “all homes, middle tier, smoothed and seasonally adjusted cut”. It is supposed to represent the middle of the market for all homes - the “typical home value” - and not the median home value. The index debuted in 2006. Within the ZHVI, there are a number of “cuts” to look at - for instance by geographical region or housing type. Here, we will focus on the flagship ZHVI, the typical home values.

In December, nominal home values increased for a 21st straight months to a new all-time high. However, once we adjust for inflation, "real" home values declined for an 8th consecutive month to their lowest level since June 2021. Last month's ZHVI came in at $356,585, up 0.20% from the previous month and up 2.63% from one year ago. However, after adjusting for inflation, the real figures are -0.11% month-over-month and -2.08% year-over-year.