The number of foreclosures in Spokane County climbed sharply in 1998 for the third straight year, putting the county within mortgage-tossing distance of highs not seen here since the late 1980s, according to county auditors figures.


A total of 658 foreclosures on deeds of trust were recorded last year, up from 474 in 1997, 220 in 1996, and 102 in 1995. Through the first five months of 1999, foreclosures continued to soar, to 320 from 225 during the same period last year.


If that rate of increase doesnt soften, the county this year could surpass the last documented peak of 853 foreclosures recorded in 1988, when the real estate market here was in the midst of an extended slump.


Phil Kuharski, a longtime Spokane economic analyst and retired investments executive, says the figures show how strongly we need commercial and government investment in new projects that stimulate the economy and, hence, the residential real estate market. He says, nevertheless, that he expects the number of foreclosures to plateau soon.


Its just working out that were in a period of somewhat slower real estate activity, due to slower in-migration of new residents to the county, a surplus of new homes, and other factors that are helping sustain a buyers market here, he says.


Kuharski believes 400 to 600 foreclosures a year to be normal for a market of Spokane Countys size, and he doesnt expect the current upswing in foreclosures to continue much past the 700 mark.


The 199 foreclosures recorded just during the first quarter of this year is more than double the 70 foreclosures recorded during all of 1993, when the countys most recent real estate boom was peaking. Kuharski says the foreclosure numbers during that several-year period in the early 1990s were abnormally low.


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, local market experts have said. Low interest rates also contributed to the paucity of foreclosures by allowing people to refinance their homes and lower their payments. Interest rates have remained relatively low, but havent been able to counter the effects of a softer local economy and other related factors. For instance, price appreciation in the second half of this decade has been modest at best.


Back in the late 1970s, at the peak of what generally is considered to be Spokanes strongest real estate boom of the last quarter-century, foreclosures totaled only about 25 a year. In 1980, however, with interest rates climbing, the number jumped to 140. It zoomed upward from there, reaching 629 in 1986 and 847 in 1987 before peaking in 1988 and then falling for five straight years as the real estate market here gained strength.


Kootenai County


Foreclosures also were up dramatically across the state line in Kootenai County last year, according to figures published in the recently released spring 1999 edition of The Real Estate Report. The report is published twice yearly by the Spokane-Kootenai Real Estate Research Committee.


A total of 340 foreclosures were recorded in Kootenai County in 1998, up from 262 in 1997, 296 in 1996, and 109 in 1995, the report said. Eighty-one foreclosures were been filed in that North Idaho county through the first quarter of this year, up from 51 in the year-earlier period.