Zillow Says 53% of Homes Lost Value: What Every Agent Should Tell Nervous Homeowners

More than half (53%) of U.S. homes lost value over the past year. 

That’s the highest share since 2012, according to new data from Zillow, and it marks a shift that many homeowners are feeling for the first time in a decade. 

Even a small dip in a Zestimate can spark worry, and this report shows why those concerns are coming up more often.

Zillow’s analysis makes one thing clear. The market is cooling in ways people can see on their screens and feel in their neighborhoods, but this is a correction after six years of rapid appreciation, not the beginning of a collapse. 

The trend is real, and so is the context behind it. 

Byron Lazine broke down the numbers in yesterday’s Hot Sheet. 

More Than Half of Homes Lost Value Over the Past Year

Zillow found that 53% of homes are worth less than they were a year ago. That number jumped from just 14% a year earlier, showing how quickly the cooling has spread across the country. 

Values have flattened nationally. Most properties have also come down from their recent peaks, with an average drawdown of 9.7%.

But for a nervous homeowner, it’s not all doom and gloom. Byron explained what this means for most homeowners right now:

“What we’re seeing is they’ve lost value — paper value. I always say that about equity: equity’s worthless unless you’re using it for something. Unless you’re pulling that money out and using it for something, or selling the home and maximizing the equity through a sale into dollars in the bank…

“Your equity doesn’t bring you revenue into your daily life. So they’ve lost paper equity, theoretically here, kind of what the values are that have declined, this loss for those homeowners. National home value appreciation has been flat over the past year.”

The metros with the largest share of homes losing value paint a clear picture of where the correction is hitting hardest. These markets saw some of the sharpest pandemic run-ups, and they are now giving back more of those gains. 

Here are the ten metros with the highest share of homes that declined year over year.

1. Denver, CO: 90.6%
2. Austin, TX: 89.5%
3. Sacramento, CA: 87.5%
4. Phoenix, AZ: 86.9%
5. Dallas, TX: 86.7%
6. San Antonio, TX: 86.3%
7. Orlando, FL: 85.2%
8. Tampa, FL: 85.2%
9. San Francisco, CA: 83.0%
10. Jacksonville, FL: 82.7%

These percentages don’t mean sellers are stuck with underwater homes. What they reflect is a normalization after an overheated period. 

That distinction is where the nuance of the report becomes essential.

Why This Isn’t Another Crash

Even with widespread annual declines, very few homeowners are losing money relative to when they bought. Only 4.1% of homes are currently valued below their last sale price. That number is up from 2.4% a year ago, but it is still far below the pre-pandemic rate of 11.2%.

This is the key difference between a cooling market and a crisis. 

Today’s declines are happening on top of years of strong appreciation. Zillow estimates the typical homeowner has seen a 67% increase in value since their last sale. 

Median tenure is about eight and a half years, long enough to build cushion even in markets seeing steep short-term pullbacks.

Some metros have seen especially large long-term gains. These cities tend to have tight supply and steady demand. Here are the five metros with the fastest increases in value since the last sale.

1. Buffalo, NY: 107.9%
2. San Jose, CA: 97.2%
3. Providence, RI: 95.3%
4. Columbus, OH: 89.9%
5. San Diego, CA: 87.9%

Zillow senior economic researcher Treh Manhertz put the dynamic in perspective with a reminder that today’s declines are part of a broader reset rather than a structural problem. 

“Homeowners may feel rattled when they see their Zestimate drop, and it’s more common in today’s cooler market environment than in recent years. But relatively few are selling at a loss. 

“Home values surged over the past six years, and the vast majority of homeowners still have significant equity. What we’re seeing now is a normalization, not a crash.”

Byron shared how agents can use this data to educate and provide value for clients:

“Zestimate has been a great tool for really smart agents to leverage as a conversation starter with homeowners.

“An emotional homeowner about a Zestimate is somebody I can help. They’re vested in this for a reason. Somebody who doesn’t give a crap about what their Zestimate is…or about anything as it relates to the real estate market, is somebody who’s not moving. They’re just staying put. I can’t help them.”

How Far Homes Have Fallen From Their Peak

What most people see when they look at their Zestimate is the drop from the high point. Zillow measured this across the country and found the average drawdown at 9.7%. 

For context, peak-to-trough declines reached 27% in early 2012. Today’s shift is meaningful but nowhere near that level.

Some markets have fallen more sharply from their highs. These metros experienced some of the most intense value spikes during the pandemic.

Here are the five metros with the largest average decline from peak value.

1. Austin, TX: 20.5%
2. New Orleans, LA: 15.9%
3. San Francisco, CA: 14.8%
4. Pittsburgh, PA: 13.2%
5. San Antonio, TX: 13.1%

Others are showing far more stability, with only modest declines from their highs. These metros are showing stronger long-term demand patterns and less pandemic volatility.

Here are the six metros with the smallest average decline from peak.

1. Providence, RI: 3.6%
2. Virginia Beach, VA: 4.6%
3. Boston, MA: 4.8%
4. Buffalo, NY: 5.4%
5. Milwaukee, WI: 5.4%
6. Salt Lake City, UT: 5.4%

What Pricing Trends Reveal About Sellers

Even with short-term value declines, homeowners are rarely forced to sell at a loss. Only 3.4% of new listings nationwide are priced below the seller’s last purchase price. That number has risen slightly from 2.1% a year ago but remains well below the 2019 level of 5.9%.

The metros with the largest share of new listings priced below last sale tend to be places where prices overheated quickly during the pandemic and are now correcting.

1. San Francisco, CA: 14.4%
2. Austin, TX: 12.6%
3. San Jose, CA: 8.9%
4. San Antonio, TX: 8.1%
5. Dallas, TX: 6.6%

Seeing prices dip can rattle even confident homeowners, especially with their house acting as their largest financial asset. 

What today’s data shows is that long-term equity remains the defining factor. 

If you’re guiding someone who’s nervous about what they see online, this report gives you the context to help them understand the difference between a temporary cooling and a genuine loss in value.