Wednesday, November 12, 2008.

Nearly one out of three homes sold in the last year was sold at a loss, and an estimated one in seven U.S. homeowners were "upside down" on their loans at the end of September, according an analysis of public records in 163 markets by Zillow.

Zillow estimates that the percentage of borrowers upside down -- owing more on their mortgage than their home was worth -- was even higher among those who bought in the last five years: 29.5 percent.

Nationwide, home prices have fallen 9.7 percent in the last year and 12.8 percent since the market peak in 2006, Zillow said.

Foreclosures made up close to one in five transactions in the last year, Zillow said, and more than half of sales in some distressed markets like Merced and Stockton, Calif.

Looking back five years, Zilllow reported flat or negative long-term price appreciation in about one quarter of the markets it analyzed.