A better way to look at prices?

There are, to paraphrase, 50 ways to measure home values, but most rely on the same basic ingredient: Sales prices. A new index from Zillow.com takes a broader view, purporting to consider the value of all homes. On that basis, the company reported Tuesday that median single-family home values in the Boston area fell 4 percent last year.

The company has posted on its Web site a lot of data, free, for markets across the country.

More traditional measures based on sales prices reported smaller drops for the Boston market in 2007. The broadest sales index, tabulated by The Warren Group, found median prices declined by 1.5 percent. The Massachusetts Association of Realtors said median prices fell by 1.3 percent.

But the Zillow numbers may more accurately reflect the state of the market. Many owners have refrained from cutting prices, producing a sharp drop in sales volume. The sales that do go through are happening at relatively higher prices, but the Zillow estimate may reflect the reason other properties aren't selling -- they're overpriced.

The company also offered some interesting breakdowns. For example, it says the value of Boston-area homes smaller than 1,200 square feet declined by 5.3 percent last year, while the median value of homes larger than 3,000 square feet declined by only 1.7 percent. This is in keeping with a theory some of you have raised in the comments section, that the market is declining disproportionately in lower-income neighborhoods.

There's a cautionary note here: The Zillow data is based on the company's estimates of property value. Anyone who's played with the site has probably found some wacky estimates for specific properties. The company, however, says the data is more accurate at broader levels, and that it has recently made major improvements to its methodology.