Why don you include foreclosures in the Zillow Home Value Index?
A. Our data is meant to give a general indication of the value of their home were they to sell it on the open market, not have it foreclosed upon. If we combined both foreclosures and non-foreclosures into a single metric, we don’t believe we’d provide good insight into either market. In many areas today, if you include foreclosures in a single metric, you’re underestimating the decline in value of foreclosed homes and overestimating the decline in value of non-foreclosure homes. However, since foreclosures exert downward pressure on the prices of non-foreclosure homes nearby, and those sales prices are included when we factor our Zestimates, the influence of foreclosures can be seen in our data. Check out our blog post on the influence of foreclosures on home value indexes.
