Under water means owing more than it is worth.

Top 10 Places Where the Housing Bubble Will Bust
The current housing bubble first reared its ugly head in 1997. Prices began to climb so rapidly that they quickly became unaffordable for potential buyers making the median household income. By 2006, some of the air started being released from the bubble, and now the balloon is on the verge of busting.

What Goes Up…Must Come Down
Experts say that prices need to fall to 1997 levels to be sustainable.

Which experts? Nice Chart though. Also, there is always an overshoot.

Metro Area	2007 Price	1997 Price*	% Decline to Return to 1997 Prices
SF-Oakland-Fremont, CA	$748,100	$288,484	61.4
Miami-Ft Lauderdale, FL	$385,300	$148,900	61.3
Riverside-San Bernardino, CA	$404,400	$157,011	61.1
Sarasota-Bradenton, FL	$337,000	$135,977	59.6
Los Angeles, CA	$589,800	$241,976	58.9
San Diego, CA	$595,200	$249,553	58.0
Orange County, CA	$697,300	$293,362	57.9
San Jose-Sunnyvale, CA	$788,000	$390,660	50.4
Nassau-Suffolk, NY	$479,800	$240,933	49.7
Sacramento, CA	$365,500	$196,738	46.1

*1997 prices have been adjusted at the general inflation rate and are reported in 2007 dollars.

Note also, that anyone who got a conventional old fashioned mortgage, 20% down, fixed rate, will be under water in these locations, and in many more not shown.

For those with interest only, no money down, negative equity, 5% down, etc., these numbers will be much higher.