Upside Down?
Upside down is a non-technical term that is used in the real estate world to mean that the mortgage on a property is more than the property can currently be sold for. It is most common on recently purchased properties in areas where there has been a significant general price decline - which applies to most of the United States right now. It is annoying but not dangerous as long as you have the financial resources to continue making your payments as planned, and there is not some other extraneous reason why you have to move or sell the house. In general it is not considered to be a cause of financial 'distress' or 'hardship'.
Most people who bought their homes several years ago are not 'under water', and most of those those who bought more recently can simply wait it out until economic conditions recover. Being upside down in the Seattle area is perhaps less of a long term problem than in those areas which have dramatically overbuilt, like Las Vegas and South Florida, or which have major systemic job loss, like Michigan and Ohio.