Zillow: Seattle's one of the worst markets to invest in

The Ruby condos on Eastlake Avenue East are shown on Wednesday, March 17, 2010. Seattle is the fourth-worst U.S. market to invest in this year, according to Zillow.com. The Ruby condos on Eastlake Avenue East are shown on Wednesday, March 17, 2010. Seattle is the fourth-worst U.S. market to invest in this year, according to Zillow.com. Photo: Joshua Trujillo/Seattlepi.com Photo: Joshua Trujillo/Seattlepi.com Image 1 of / 1 Caption Close Zillow: Seattle's one of the worst markets to invest in 1 / 1 Back to Gallery

Seattle is the fourth-worst U.S. market to invest in this year, Seattle-based real estate website Zillow.com reported Tuesday.

Blame the fact that the area did pretty well during the housing boom and hasn't fallen as far as many other previous hot spots since the crash.

Zillow looked at how out of whack home prices are with their historic relationship to incomes and rents, the state of foreclosures and which direction prices have been heading recently.

The site found some good places to invest, including many hard-hit California markets where prices may have over-corrected in the downturn.

"Affordability is at a historic high, and there are lots of opportunities out there for average homebuyers and investors alike," Zillow PR Manager Katie Curnutte wrote on the company's blog.

"To be clear, we're not talking about people looking for a quick flip, but sophisticated investors who are interested in making a long-term investment in properties that will generate rental income. These types of investors usually expect modest value appreciation, so are focused more on regular positive cash flow."

See this gallery for the 10 worst investment markets, followed by the 10 best.

Also Tuesday, Zillow reported that home prices nationwide have now fallen farther than they did during the Great Depression.

Specifically, it said: "the Zillow Home Value Index has now fallen 26 percent since its peak in June 2006. That's more than the 25.9 percent decline in the Depression-era years between 1928 and 1933."

But the site also noted that an improving economy should boost the housing market, gradually.