The number of foreclosures in Spokane County more than doubled in 1997 for the second straight year, according to county auditors figures. However, a slower rate of increase through the first quarter of this year suggests that the recent upward trend might be losing steam.


A total of 473 foreclosures on deeds of trust were recorded last year, up from 220 in 1996 and 102 in 1995. Through the first three months of 1998, though, foreclosures increased only slightly, to 124 from 119 during the same period last year.


Phil Kuharski, a Spokane economic analyst, says he sees a strong connection between the foreclosure figures and other local real estate market indicators, such as a decline in building permits, lackluster home sales, and increased apartment vacancy rates.


All of that ties together to just indicate that while its still a pretty good market because the interest rates are down, the reality is that most of the sales are sort of a rotation in the market rather than new people, he says.


The in-migration of new residents into the countystrong here just a few years agohas fallen sharply because Spokane Countys economy now is weaker than the state and national economies, he asserts.


Until we see some new economic stimulus hit this area, I think youll see a continuation of that. We desperately need the stimulus of road projects and commercial construction, and related types of activity that attract new people, Kuharski contends.


Nevertheless, he says he considers 400 to 600 foreclosures a year to be normal for a market of Spokane Countys size, and doesnt expect the upswing in foreclosures to go much beyond that range.


There likely is more to the story than the weakening of the local economy.


Heavy consumer debt has been blamed for recent increases in personal bankruptcy filings both here and nationally, at a time when the U.S. economy is doing well, but the extent to which such debt might be playing a role in home foreclosures is less clear.


Shayla Bolt, education director for Spokanes Consumer Credit Counseling Service of the Inland Northwest, says, Definitely when people feel stressed financially, theyll resort to some drastic measures. Its all a real spiral effect when it comes to debt. I would say you obviously have to look at a correlation.


The 124 foreclosures recorded here in the most recent quarter compares with just 70 foreclosures recorded during all of 1993, when the countys most recent real estate boom was peaking. The rapid appreciation of property values here in the early 1990s gave people enough equity in their homes that even if they got into financial trouble, they werent likely to walk away from their mortgage loans, market experts say. Low interest rates also contributed to the scarcity of foreclosures by allowing people to refinance their homes and lower their payments.


Interest rates are low again now, but havent been able to counter the effects of a softer local economy and whatever other factors are contributing to the current rise in foreclosures.


Back in the late 1970s, at the peak of whats considered to be Spokanes strongest real estate boom of the last quarter-century, foreclosures totaled only about 25 a year. In 1980, with interest rates climbing, the number jumped to 140. It topped out at 853 in 1988.





Through the first three months of 1998, foreclosures increased only slightly, to 124 from 119 during the same period last year.