Metropolitan Washington is the object of dueling data points about the health of its real estate market.

Some reports show parts of the region experiencing above-average gains in sale prices, while other reports show portions of the area above the national average in underwater homeowners.

We asked Zillow’s chief economist, Stan Humphries, to put the issue into perspective. In his responses, via e-mail, Humphries says that in many cases, things may not be as bad as they appear on paper.

Even with the improvement in home values and sales here, many houses are still underwater. During the first quarter of the year, 32.4 percent of homeowners in the region were underwater, compared with 31.4 percent nationally, according Zillow. Moreover, according to Zillow, homeowners in the Washington area were underwater by $42.9 billion. Why is the problem persisting here?

Many homes remain underwater simply because home values are still relatively low. In the Washington metro [area], home values have fallen nearly 30 percent since their peak in April 2006 and are back to April 2004 levels.

Importantly, though, 35.4 percent of homeowners in negative equity are underwater by less than 20 percent. This is even higher in the District itself, where 41.6 percent owe less than 120 percent of their homes’ worth. In fact, all but two of the 22 counties in the Washington metro have at least 30 percent of homeowners in negative equity who are underwater by less than 20 percent.

So, it’s important to remember that as long as underwater homeowners are paying their mortgage on time and are not too deep underwater, negative equity remains a loss only on paper and only becomes an issue when they decide to sell a home. For those who are not deep underwater, as they continue to pay down their principal and as home values rise in many areas, they will build equity in their home over time.

Sounds like you’re saying that not all the underwater homeowners are behind on their mortgages, right? Are you able to determine approximately what percent of the underwater homeowners are behind?

Yes, that’s correct. Just because someone is underwater doesn’t necessarily mean they are behind on their mortgage. Zillow’s report shows that among underwater borrowers in the Washington metro, 90 percent of these homeowners continue to pay their mortgage on time (only 10.6 percent are 90 days or more delinquent on their mortgage).

Your report released earlier this week shows that in May, 27.6 percent of all homes in the Washington metropolitan area sold for a loss. Can you put that into context for us — does that represent an improvement or retrenchment? What are the factors driving that number?

[The issue of homes selling] for loss in the Washington metro has been in a bit of a sawtooth trend after jumping from nearly 5 percent of homes sold for a loss in June 2007 to 29.6 percent in April 2009 — a response seen throughout the country, driven by the burst of the housing bubble pushing home values down, thus increasing the likelihood of homeowners having to sell for less than their purchase price.

In the Washington metro, homes sold for a loss peaked at 32.5 percent in February 2012, and steadily declined since. In May, 27.6 percent of homes sold for a loss, representing a 1.9 percent month-over-month decrease from April and a 2.6 percent decline from year-ago levels.

It’s a good sign that homes selling for a loss have decreased, and it’s indicative of a general stabilization of home values in the Washington metro region. Inventory is tight in many areas, which is not only putting upward pressure on home values, but is creating a more competitive buyer’s market.

Between May 2011 and May 2012, the number of homes listed for sale on Zillow in the Washington metro declined 18 percent. The inventory shrinkage was particularly acute in the bottom tier of homes based on value where the decline in inventory across the year was 30 percent compared with an 8 percent decline for inventory in the top tier of homes.

How does the D.C. area compare with other parts of the country in underwater houses?

Despite the Washington metro’s rate of negative equity faring slightly worse than the nation, it is doing much better than many other major metro areas. In Las Vegas, for example, 71 percent of homes with a mortgage are in negative equity, which represents nearly $25.1 billion. The Phoenix, Atlanta, Orlando, Riverside and Sacramento metros report nearly half or more of homes with a mortgage are in negative equity.

Have we hit the bottom here? What’s your forecast for the rest of the year?

According to the Zillow Home Value Forecast, released with our first-quarter Real Estate Market Reports, the Washington, D.C. metro hit bottom in the third quarter of 2011. We forecast home values to rise slightly through March 2013, appreciating 0.5 percent over the next year.