I live in a co-op in Seattle, and although prices for co-ops generally run somewhat lower than prices for condominiums here, the appreciation rate seems about the same to me. A friend just sold her share (co-op studio) for $198,000. I believe she bought it 7 or 8 years ago for around $125,000. I bought my share in my co-op in 2000 on the first day it was shown and for full asking price. At that time, the market for sellers was very good.
Most of the co-ops in Seattle are on Capitol Hill and Queen Anne Hill. Their central-city locations are an attractive feature because they are in older, walkable neighborhoods with lots of trees and with shops nearby and have easy bus access to downtown and the U District.
There is really only one lender for co-ops, and that is National Co-op Bank. There are several mortgage brokers in town that handle co-ops, but no actual lenders to my knowledge.
I'll repeat what others have said: If the co-op is an older building, make sure the infrastructure is up to date: plumbing, electrical, tuck-pointing (if it's a brick veneer building), roof, termite-free. If the association has deferred maintenance, you'll eventually be paying (by assessment) for that, and it won't be cheap.
A current co-op member