This paper presents a new approach to estimate damage severity for shear-wall buildings using diagonal terms of a modal flexibility matrix estimated from dynamic properties. This study aims to provide a fundamental concept for quantifying the damage of realistic buildings by investigating an idealized shear-wall building. Numerical studies were performed on a 5-story shear-wall building model to validate the applicability of the presented approach, using two damage patterns. With the numerical simulations, the proposed approach accurately determined the damage ratio of the specimens. Experiments were also conducted on a 5-story shear-wall building model for which the system parameters were almost the same as those in numerical simulations. The estimated damage-quantification results from the experimental validations demonstrated that the performance of the presented method for shear-wall buildings was both suitable and accurate.