The Spokane County Auditor recorded 378 foreclosure filings here in the first half of this year, up 49 percent from 254 filings in the year-earlier period.
If that rate were to continue, total foreclosures here for the year would reach 834, which would be the highest since 2003, when foreclosure filings in the county totaled 1,030. Foreclosures here peaked at 1,152 in 2002.
Some economic and real estate observers here expect Spokane County's foreclosure numbers to climb near or above the 2002 peak that followed the last recession, and RealtyTrac, an Irvin, Calif.-based real estate data-collection service, reports that nationwide foreclosure activity also is continuing to rise to record levels.
Randy Barcus, chief economist for Spokane-based Avista Corp., says he expects foreclosure numbers here to continue to rise for another year or two before they begin to fall.
"I'm decidedly pessimistic about the trend in foreclosures for the next couple of years," Barcus says. "It will repeat prior recession patterns."
Yet, he says the magnitude of foreclosure actions here won't be as profound as in other parts of the country.
"I don't want to understate people's pain," he says of Spokane's foreclosure numbers. "It's unfortunate for the folks it happens to, but it's a normal part of the economic cycle."
RealtyTrac reported that one in 84 houses across the country was the subject of at least one foreclosure filing in the first half of the year, up from one in 159 homes in the first quarter.
In Washington state, one in 138 homes was the subject of a foreclosure filing in the first half of the year, up from one in 283 homes in the first quarter.
Michelle Sabolich, spokeswoman for RealtyTrac, says the company hasn't completed all of its calculations yet for foreclosure rates for metropolitan areas in January through June this year.
Spokane County, however, had more than double the foreclosure filings as of June than it had in the first quarter, when RealtyTrac reported that one in every 1,060 homes here faced foreclosure. The company ranked Spokane then as having the 26th lowest foreclosure rate of 203 metropolitan areas in the U.S. with populations of more than 200,000.
Barcus says the rising foreclosure rate here is tied more to the unemployment rate than to the real estate speculation and unconventional lending practices that contributed to housing market devastation in other parts of the country.
The unemployment rate here in June was 8.9 percent, up sharply from 5.3 percent in the year-earlier month, according to figures from the Washington state Department of Employment Security.
Doug Tweedy, the department's Spokane-based regional labor market economist, says the unemployment rate here peaked at 10.6 percent in March, and he expects it will remain in a "sawtooth" pattern at between 8 percent and 9 percent through 2010.
"Improvement in employment numbers probably will lag the economic recovery," he says.
Barcus says foreclosures will remain in an upward trend until the unemployment rate improves significantly.
"High unemployment will persist for the next two years," he says. "I think we're going to see foreclosure numbers up around 1,000 to 1,200 next year and the year after."
Rob Higgins, executive vice president of the Spokane Association of Realtors, says he doubts that rising foreclosure numbers are having a significant effect on the real estate market here.
Although the median home sales price here in June was $177,500, down 8 percent from $193,000 in the year-earlier month, the price decline was driven more by overall slow sales than by foreclosed, or stressed, properties, Higgins says.
"It looks like 5 percent of sales are short sales," he says, meaning the selling price is less than what is owed on a mortgage. In other areas where foreclosures are contributing to declines in real estate prices, such as some California markets, 30 percent or more of sales involve stressed or bank-owned properties, he says.
Judging by earlier economic cycles, Higgins says he doesn't expect to see a quick turnaround in foreclosure numbers here.
"We're going to see foreclosures going up," he says. "Foreclosures lagged the bottom of the last recession by about a year."
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