Though Seattle's housing and economic situation are not good, it's not as dire as some parts of the country, said experts in the industries at a panel discussion in front of the Seattle City Council Monday.

Susan Greenwald, director of single-family operations at Homestreet Bank, said nationally the percentage of homes either in foreclosure or with loans in delinquency is roughly just below 12 percent. In Washington State, it's 6.58 percent.

While it's better than the national average, Greenwald said she has never seen numbers that high in Seattle during her 30 years in the business.

"We have some real challenges ahead," she said.

Greenwald spoke with four other panelists from 10 a.m to noon, March 23 at a special council briefing titled,“The State of the Regional Economy:  A Panel Discussion Among Local Experts," chaired by council president Richard Conlin.

Greenwald attributes the state's lower number to less mortgage fraud against lenders here than other parts of the nation, such as Michigan.

She cited the number of homes in Seattle owned by Fannie Mae and Freddie Mac, the government agencies that buy mortgages from lenders, as an example. There are 27 Fannie Mae owned homes here, and 13 by Freddie Mac; compare that to Phoenix, Ariz., where Mae owns 921 homes and Mac 371.

"We need to focus on not heading anywhere close to those kinds of numbers," said Greenwald.

There is some good news, she said. Homes below $600,000 are selling faster now here, and those at above $800,000, which are typically difficult to finance, are moving better as well.

As an example, a property in Redmond priced at $380,000 recently sold for just over $400,000, said Greenwald, noting that a home selling above its listing price has not happened in a long time.

Greenwald said the most prevalent reasons people fall behind in their mortgage payments are due to job loss, divorce, death in the family and mishandling of personal finances, such as delinquent credit card debt.

"We're probably the ship behind the Titanic," said Eileen O'Grady, president of Elliott Bay Associates and an expert in interest rate management and mortgage structured finance. "We are not going to hit the iceberg, but we're still in icy waters."

O'Grady said that the simple principle of "what's best for the borrower is also best for the lender and investor," has been lost site of. She said that priority needs to be renewed.

Stan Humphries, a chief economist of residential real estate for zillow.com, said home prices here have declined by 12 percent in the past year, down a total of about 17 percent since the housing peak in mid-2007. Those figures are roughly in-line with the rest of the country, he said.

However, Seattle's doing far better when compared to other areas of similar size that were hit much harder, such as Riverside, Calif.

Home prices in Riverside have come down 45 percent from its peak in 2006, and is down at least 31 percent each year.

In Seattle, Humphries said homes closer to downtown are holding values better than those in neighborhoods, suburbs and other cities.

In Ballard, homes values are down 13 percent from 2007; down 10 percent in Queen Anne; and down 12 percent in Beacon Hill.

Foreclosure rates in 2008 in Seattle was about 11.5 percent, while the nation was at 20 percent. About 21 percent of homes in the area are in negative equity, while it's 17.5 percent for the country as a whole, according to Humphries.

Humphries expects foreclosure rates here to increase before getting better, especially if job losses continue.

Dick Conway, of Dick Conway and Associates, a local firm that specializes in economic research and consulting, said the current economic situation is nationally the "worst recession since the Great Depression."

"There's not one corner of the economy that has not felt the recession," said Conway, adding that job cuts have been deep and across the board.

The recession, largely fueled by the housing bubble burst, "should not have happened," he said.

In this region two years ago, employment was growing at two times the national level. But in 2008, more than 20,000 construction jobs were lost, as well as major cuts at Boeing, Microsoft, the takeover and job losses at Washington Mutual and most recently 180 jobs cut when the Seattle Post Intelligencer ceased its print operations.

"We're experiencing a similar downturn to the national economy in terms of depth and duration," said Conway.

Conway noted that the region's 2001-2003 recession resulted in more job losses, however.

The recession is also hitting state and local government's revenue hard, and exposing a weakness: the reliance on sales tax.

Locally, the city is facing a $25 to $30 million budget cut in general funds and city departments have been asked by Mayor Greg Nickels to make cuts by about 3 percent.

Desiree Phair, a regional labor economist with Employment Security, said unemployment in the region is up to about 8.5 percent, whereas one year ago it was at about 4 percent.

"The trend is clearly that unemployment has been rising in our area," said Phair.