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Airway Heights experiences high foreclosure rates in 2011

Cheney Free Press of Cheney, Washington

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Residential development foreclosures play big role in high rates

Last year, Airway Heights saw 369 properties go into foreclosure, amounting to 5.14 percent of the 99001 zip code's housing units.

That percentage exceeded the state's foreclosure rate of 1.18 percent and the national rate of 1.48 percent. Its rate of 1 in 19 housing units going into foreclosure was eighth-highest in the nation, according to Daren Blomquist, marketing director for RealtyTrac, an online real estate research firm.

The real story is behind the numbers.

Of the 369 foreclosed properties in the zip code, 36 were included in RealtyTrac's December report.

While a few housing units are scattered throughout the city, most of the foreclosures occurred in the undeveloped portions of the Russell Heights development.

According to information submitted to the RealtyTrac website, the undeveloped lots entered into foreclosure Nov. 30 last year. The default amount totaled $542,882 for the 22 lots.

The lots are owned by the Russell Heights LLC, according to the Washington Secretary of State's office. Its governing people include Mike Shuler, Sundevil Investments LLC and Golden Rain LLC. The property was registered under realty agent Kimberly Jeffreys, who is part of Sundevil Investments.

According to a 2010 Spokesman Review article, Sundevil Investments LLC was allegedly involved in real estate fraud activity. The lawsuit alleged that three separate real estatejdeals in Airway Heights were fraudulent. Loans for the Russell Heights project were approved March 10, 2005.

The Russell Heights development was split into two phases, one of which is complete and contains 43 housing units. The second phase, located on West Chandler Avenue off of South Garfield Road, would consist of 22 duplexes.

In addition to the Russell Heights development, Russell Heights LLC also purchased land to the north, which would have been home to Kim's Court Apartments. The 224-apartment complex would contain a variety of unit styles and incorporate some townhouses as well.

The 22 undeveloped lots are up for public auction Feb. 24, with an opening bid of $494,541. The trustee handling paperwork for the property is the Blackstone Corporation, based in Spokane.

Blomquist said that land purchased during the real estate boom a few years ago could be why the foreclosure rate in the city is so high, compared to surrounding zip codes.

"You usually see higher foreclosure rates in communities where one characteristic is a lot of new homes built during the last few years during the top of the market, and sold during the top of the market," he said. "Then you have those homeowners who bought at the top of the market now owing a lot more than their property is worth."

For the month of December, Spokane County saw foreclosures for 1 in 1,815 homes, while Cheney had two and Medical Lake had one.

"The fact that their default amount is so high shows that this isn'tanindividualhome," Blomquist said of Airway Heights.

Other factors that can contribute to a foreclosure include high unemployment in a given area.

The Airway Heights zip code has seen increasing foreclosure rates over the past few years, with 135 in 2008, 242 in 2009 and 346 in 2010. Last year's 369 foreclosures marked the lowest increase since RealtyTrac has kept records. Compared to the rest of the state, Blomquist said the zip code has typically had a high foreclosure rate.

James Eik can be reached at jantes@cheneyfreepress.com.



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Original Publication Date: January 19, 2012



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