The number of foreclosures in Spokane County last year jumped for the fourth straight year and exceeded 800 for the first time since an extended real estate slump in the late 1980s.


Kootenai County saw an increase for a third straight year and, with about 360 foreclosures, posted its highest numbers of the 1990s.


Observers in both counties say those levels likely will increase again in 2000.


According to Spokane County auditor figures, 835 foreclosures on deeds of trust were filed in 1999, which is a 27 percent increase over the 660 foreclosures reported the year earlier.


The 1999 figures are within 20 foreclosures of peaks reached in 1987 and 1988, just before the Spokane areas last significant economic surge.


In Kootenai County, the 359 reported foreclosures last year represented a 5.5 percent increase over 1998.


Phil Kuharski, an economic analyst here who has followed the Spokane market for about 40 years, predicts the number of foreclosures this year will again be between 800 and 900, but expects a decline in those figures during the following two or three years. Chuck Hollings-worth, a Coeur dAlene-based senior regional manager for Boise-based Pioneer Title Co., says the numbers likely will rise in Kootenai County, as well, in the coming year, though hes unsure to what degree.


Kuharski and other observers say the trend in foreclosures is an aftereffect of a surge in home-buying activity and property values in the early 1990s. They also say that foreclosure activity here wont ease this year unless theres a jump in job growth.


Kuharski says sharp gains in foreclosures here are a hangover from the fast expansion of people and jobs that occurred roughly from 1989 to 1993. In that period, he says, more people moved to Spokane for well-paying jobs and, as demand for real estate increased, property values jumped.


At that time, Kuharski suspects that many people bought more expensive homes than they could afford, banking on either pay increases or, failing that, an appreciation in property values that would allow them to sell their homes for a profit if necessary.


The relatively short boom period, however, has been followed by a slow rate of in-migration and a much softer real estate market, with barely-rising property values.


Since 1994, home appreciation has slowed to about 1.7 percent a year, according to figures from the Multiple Listing Service of Spokane County.


Half of the effect400 or more deeds of trustis really related to the people on the fringe who got caught in the exuberance of the market, says Kuharski, who has said that a county this size typically would have between 400 and 600 foreclosures annually.


Rob Higgins, president of the Spokane Association of Realtors, says the upward trend in foreclosures is a concern in the real estate community. He concurs with Kuharskis theory that the increase in foreclosures is an aftereffect of the early 1990s boom and says the near-peak numbers reinforce the need for job growth in the area, which he says would temper the surge in foreclosures.


Kuharski says increasing foreclosures indicate a buyers real estate market in the Spokane area, but both he and Higgins point to other, more positive economic indicators that cloud the real estate picture here.


For instance, real estate prices have increasedalbeit slower than in the late 80s and early 90sin year-to-year comparisons, and the number of sales reported to the Multiple Listing Service of Spokane also has risen.


This phenomenon of people having to walk away from their homes in Spokane needs a more in-depth review, Kuharski says.


He says the Spokane-Kootenai Real Estate Research Committee, of which hes a member, might conduct a study on the topic, though nothing has been formalized yet.