West Seattle resident Shelly Pastachak decided to put her home on Southwest Webster Street on the market in late August. In the two months since, she has had little luck selling.

"It seems there is no interest in it whatsoever," Pastachak said.

Even lowering the asking price by $50,000 didn't increase her offers, she said.

Pastachak said she thinks her inability to sell is 80 percent due to a lack of available loans caused by this fall's mortgage crisis.

However, according to a number of people in the business, local banks may have more mortgage opportunities available than nervous buyers anticipate, and the real estate market is proving more resilient in Seattle than it is nationally.

David Arnesen, a professor specializing in real estate law at Seattle University, said the housing market is declining because of inappropriate lending practices and because buyers bought homes assuming the property value would continue to escalate.

While he acknowledged that the current climate is a disaster for those people struggling to pay-off low-end homes, Arnesen said the Seattle housing market should rebound more quickly than the national trend.

He said the rising cost of rent, coupled with more responsible lending practices on the part of banks, will help the market heal and return homebuyers' confidence by the middle of next year and that West Seattle will continue to be a desirable market.

"I think the Seattle market is absolutely going to come back better than the rest of the country," Arnesen said. "People will continue to move to the Puget Sound as long as we have good employment opportunities."

In the meantime, Pat Redmond, president of Viking Bank started in Seattle in 1992, said there are still loans available at many local banks for people who have good credit and a down payment.

Redmond said local banks are more inclined than national chains to invest in their communities because their future depends on the success of those communities.

Investors are more confident in local banks as well, he said. As the divide between national banks and the consumer grows, customers are becoming more confident in local banks, where they feel better informed on the operations.

"People want to know what's going on with their money," he said.

Though the ability to make a large down payment will increase the ability for potential homebuyers to get a loan, there are still opportunities available for people without that ability and who have good credit.

At Boeing Employee's Credit Union, there are many viable programs available for first-time homebuyers that allow them to spend as little as $500 on a down payment.

Aaron Bresko, vice president of lending at the credit union, said credit unions can offer investors more options than some banks, and while lending has slowed at many banks during the financial downturn of recent months, Boeing Employee's Credit Union has seen an increase in the volume of their loans.

But, the confidence at local banks is not necessarily translating to confidence in the public.

Ray Poletti, broker at Ballard Realty, said financing is available, but buyers are unaware of it or are too worried by the current financial crisis.

"It's not like people can't get loans," Poletti said.

Poletti too said he thinks the market will moderate sometime in 2009.

Arnesen said in reality it's a buyers market right now for people who can afford to put money down, but those people are nervous at the moment.

"Buyers are being very cautious," he said. "Most banks today don't have people lining up at the door to take out loans like they used to."

West Seattle seller Pastachak said realtors say the situation is not that bad, but she thinks it is bad for people who have to sell.

"Realtors don't want to give you the real story," she said.

Redmond said the media is partially to blame for the insecurity of buyers. People are being constantly bombarded with projections of an economic crisis that they cannot escape, he said.

"My concern is that we can't keep confidence as high as it needs to be for success," he said.

Arnesen said the best advice until the market gets back on its feet is for sellers to be patient and recognize that it might take four to six months to sell their homes and buyers should not take out mortgages they can't afford in the long term.

Until then, Pastachak has decided to start showing her house for rent because she said there is a lot more interest in rental homes.

She said she is one of the lucky cases because she doesn't need to sell the house right away and can wait until the market is better, but she knows that isn't the case for everyone.

"If you need to sell now, boy I really feel for you because it's tough out there," she said.

Michael Harthorne may be reached at 783.1244 or michaelh@robinsonnews.com and Rose Egge may be reached at 923.0300 or rosee@robinsonnews.com

October 27, 2008
Photo credit: Photo by Steve Shay

THERE ARE MORTGAGES TO BE HAD. The national economic crisis seems to result in more West Seattle homes for sale but small banks, local credit unions have money to loan on good credit and downpayment.