The real estate market may be showing faint signs of life, but other statistics reveal many homeowners have lost significant value in their homes and are in a negative equity position. Nearly 22 percent of homeowners currently owe more on their mortgage than their home is worth, according to the real estate Web site

The first quarter of 2009 saw a continued decline of home values with the Zillow Home Value Index dropping 14.2 percent on a year-over-year basis to a value of $182,378. From its peak in the second quarter of 2006, U.S. real estate values have dropped a total of 21.8 percent after nine consecutive quarters of year-over-year declines.

That loss of value has left 21.9 percent of all U.S. homeowners "under water" at the end of March 2009. Many of those homeowners put little or no money down when they purchased their homes, but others have seen plunging home values erode much or all of their down payments.

"The sharp drops across the country have left eight regions — including the Modesto, Calif., Stockton, Calif. and Fort Myers, Fla. — with median values that are less than half those at their peak," said Zillow vice president of data and analytics Stan Humphries in his blog. "In 85 of the 161 markets covered this quarter, the annualized change over the past five years is negative or flat. For the first time in the data series stretching back to 1996, the five-year annualized appreciation for the United States overall is flat. Ten-year annualized appreciation is 4.7 percent."

Zillow estimates U.S. homes lost $704 billion in value during the first quarter of 2009, but despite that bad news, there were a few markets that started to show the first tentative signs of improvement. Markets such as Los Angeles, San Diego, Modesto and Merced — all which went into decline early and have sustained large declines — have now seen two or more consecutive quarters of smaller year-over-year declines in home values than in the previous quarter, Zillow reports.

Specifically, in the Los Angeles metro area, the Zillow Home Value Index fell 18.9 percent year-over-year, a smaller decline than the 20.8 percent and 20.7 percent declines seen in the third and fourth quarters of 2008, respectively.

In San Diego, home values fell 18 percent year-over-year, after falling 19.1 percent and 18.9 percent in the third and fourth quarters of last year. Both markets have been hard-hit by the housing downturn.

Los Angeles home values have fallen 33.6 percent since the peak of the market in the first quarter of 2006, and San Diego's have fallen 35.4 percent since that markets peak in the third quarter of 2005.

"It's quite a statement of current market conditions when the good news is that the bad news isn't getting worse," Humphries said.