Underwater Homes in the Bay Area

Here's some useful market intelligence from Zillow (by way of the San Francisco Chronicle):

http://www.sfgate.com/webdb/homepricesdrop/

Choose a zipcode and the database will tell you what percentage of homes are currently underwater (i.e., are worth less than the amount owed on the mortgage). It will also tell you what percentage of sales have resulted in losses within the last year.

According to Zillow, 7% of San Francisco homes are currently underwater, while 15% of sales within the last year were for less than the sellers had originally paid. Those numbers don't seem alarming. For the greater Bay Area, however, Zillow estimates that 21% of homes are underwater, and that 47% of sales were for less than the sellers had originally paid.

That seems like a recipe for a continuation of the downward spiral of Bay Area home prices. (You can get a summary of the other Bay Area counties by viewing this online map.)