Strong job growth and a steady housing market are helping Spokane County buck a national trend of rising foreclosures.


The Spokane County Auditors Office says the number of foreclosures on deeds of trust here plummeted by 43 percent last year, to 274, following a 40 percent fall in 2005.


Last years decrease is yet another indication that the housing market here is atypical compared with the nations, says Randy Barcus, chief economist at Spokane-based Avista Corp.


In a vibrant real estate market, people who are getting behind on their mortgage payments often can sell their home for more money than they owe before its foreclosed on, Barcus says.


If people cant make their mortgage payments, they can sell their house instead of losing all of the equity, he says.


Nationally, many real estate markets are experiencing flat to declining home prices, he says, and that economic environment can trigger a greater number of foreclosures.


In Spokane County, however, the average home-sale price rose 14.5 percent in 2006, to $197,400. In 2005, the average price jumped 16 percent, to $172,600. Barcus is predicting the average price here will rise another 10 percent to 12 percent this year.


Rob Higgins, executive vice president of the Spokane Association of Realtors, says the falling number of foreclosures bodes well for the Spokane real estate market, especially considering that foreclosures are rising elsewhere.


Lower foreclosure numbers here and rising real estate prices are all positive signs, Higgins says.


Foreclosure rates also move inversely to job growth, Barcus says.


The last time foreclosures were this low was in the big job-increase period of the 1990s, when foreclosures in Spokane County were below 200 from 1991 to 1996, bottoming out at 70 in 1993, he says.


In 2006, more than 10,000 jobs were created in Spokane County, an increase of about 4.5 percent.


In terms of percentage gain, Spokane County is experiencing the fastest job growth of any county in the statefaster even than Clark, Pierce, Kitsap, and all other counties that have bursts in job growth, Barcus says.


Hes predicting significant continued job growth, in the range of 5,000 to 8,000 jobs, here this year, and says thats in a market in which there already is an estimated 2,500-plus unfilled positions.


If businesses hire all they say they are going to in 2007, we should have about 7,500 people entering the work force, he says. I can see job growth is going to be strong, and we havent even heard all of the job announcements yet.


If Spokane has a problem, its that it doesnt have enough workers, he says.


The best kept secret in the West is how strong the job and housing markets are from Eastern Washington to Western Montana, he says.


Doug Beaudoin, senior vice president and manager of the mortgage department for Spokane-based Inland Northwest Bank, says the Spokane real estate market has realized good, but steady, appreciation.


Its a healthy real estate market here, he says. It hasnt had the ridiculously high spikes that tend to get people in over their heads.


While the Wall Street Journal recently reported that the percentage of U.S. borrowers behind on their mortgages in the last quarter of 2006, at more than 2.5 percent, was the highest in five years, Beaudoin says he doesnt believe thats happening here. He says its more likely that people are getting behind in regions where adjustable-rate mortgages and nontraditional loans are marketed more aggressively.


Home-loan borrowers in Spokane generally take out traditional 15- or 30-year fixed-rate mortgages, Beaudoin says.


I like it being traditional lending in Spokane, he says.


Across the border


Meanwhile, the number of foreclosure actions begun in Kootenai County last year grew 8.5 percent, to 369, following a downward trend since 2001, when 781 such actions were reported, says Pioneer Title Co. of Kootenai County.


Barcus says hes not alarmed by a one-year uptick in Kootenai County foreclosures, especially since the number recorded in 2006 was less than half the level five years earlier. Other economic conditions there show continued steady growth, he says.


Kootenai County job growth was slightly above 5 percent for 2006. Job growth regionwide was strong enough to absorb some of the weakness that was anticipated in the housing market in Kootenai County because of excess inventory, Barcus says.


Home-sale prices there averaged $239,300 in 2006, up 13.3 percent from a year earlier, the Coeur dAlene Multiple Listing Service says.


Theres quite a bit of interplay between Spokane and Kootenai counties, Barcus says. If Kootenai County had an extra supply of housing, some people looking to buy wouldnt care which side of the state line its on.


Nationwide, more than 1.2 million foreclosure filings were reported in 2006, up 42 percent from the previous year, says RealtyTrac Inc., an Irvine, Calif.-based company that publishes a database of foreclosure properties. In Washington state, 18,527 foreclosure filings were reported in 2006, up 25 percent from the previous year. More than 7,200 foreclosures filings were reported in the Seattle-Bellevue-Everett region in 2006, an increase of 136 percent from the previous year.


Contact Mike McLean at (509) 344-1266 or via e-mail at mikem@spokanejournal.com.