SEATTLE -- Zillow’s chief economist said there’s some good news in our crazy real estate market.

“We’re seeing home value appreciation north of 16 percent annually,” said Svenja Gudell.

That’s allowing fewer homeowners to be underwater, according to Zillow’s most recent negative equity report.

Seattle and its suburban areas are seeing about 7 percent of homes that are still underwater. That’s much better than it was in 2012, when almost 40 percent of area homes were underwater, which means homeowners.

Nationally about 12 percent of homes are underwater.

Gudell said one problem locally is not many are selling and cashing in because selling means having to buy something in a tight market.

“Many potential sellers are saying, ‘I’m not gonna bother selling because 'I don’t want to become a buyer in this market,’” she said.

Gudell said there’s still work to be done because she said the normal rate of homes underwater is supposed to be between 2 and 3 percent.