Distributed computing strategy over a network of wireless sensors has emerged as a promising application in order to enable real-time structural health monitoring. Most previous studies of distributed computing strategy consider relatively simple operations like modal parameters identification (e.g. frequencies and modal shapes) that cannot directly assess structural health condition demanded by many practical engineering applications. This article focuses on developing distributed computing strategy techniques in wireless sensor networks used for direct stiffness estimation of structural damage locations and extent. An improved frequency-domain regression method is proposed to detect and quantify damage in frame structures. In the proposed method, the static condensation technique is adopted to reconstruct the rotational responses on joints, which is considered as inputs to estimate stiffness. Therefore, this improved method provides a more practical and accurate tool for structural damage detection. A numerical simulation of a five-story two-bay frame structure demonstrates that the proposed damage detection method using a limited number of wireless sensors can identify, locate, and quantify the structural stiffness changes accurately.