The median price paid for a home in California was $244,000 in February, down 2% from one year ago, according to DataQuick.

It's the fifth straight month of yearly declines after 11 months of increases. While the median price in California remains above the $221,000 low in April 2009, it has been cut nearly in half from the $484,000 peak in early 2007.

The steep decline has pushed more Californians underwater than in almost any other state. There, 32% of homeowners owe more on their mortgage than the home is worth, trailing only Nevada, Arizona, Florida and Michigan, according to recent data from CoreLogic ($14.07 0%). That percentage is more than three times the amount in Texas.

Prices will continue to drop as long as foreclosed properties take up such a large percentage of home sales. There were 27,320 sales in February, down 2.8% from one year ago. Of those, 40.1% of the properties had been foreclosed on in the previous year.

However, that percentage is on the decline, down from 40.4% in January, 44.3% one year ago and 58.5% at its peak in February 2009.

Short sales, though, are on the way up. These transactions made up 18.9% of the market in February, up from 17.6% one year ago and 11.2% two years ago.

Write to Jon Prior.

Follow him on Twitter @JonAPrior.