U.S. home values fell by nearly 10% in the second quarter of 2008, causing one in four home sales over the past year to be at a loss, according to a new real estate survey.

Zillow.com, an online real estate community, is reporting that U.S. home values in the second quarter posted their largest year-over-year decline in 12 years and are also down 1.7% from the first quarter.

The report says the median U.S. home value of $206,919 has not been this low since the first quarter of 2004.

"The second quarter is the sixth consecutive quarter of home value declines and we see little promise of turnaround in the short-term as the rates of decline have yet to slow and, in fact, actually accelerated in many markets," Stan Humphries, Zillow's vice-president of data and analytics, said in a release. "The high rates of negative equity are having a direct effect on home sales figures as we've seen considerable growth in foreclosure transactions and homes selling for a loss."

California has some of the highest rates of homes being sold for a loss - more than 60% - while homes sold in foreclosure in some parts of the state have exceeded 50% of total sales.

The New York - Northern New Jersey - Long Island metropolitan statistical area had the lowest rates of foreclosure among the markets monitored by Zillow. Only 8.8% of homes in that region sold for a loss since Q2 2007, and homes sold in foreclosure stood at just 3%.

By Stephen Huebl and edited by Nancy Girgis