We can eliminate a lot of disease problems, now that we have identified the tree as a spruce, including blister rust.
Don't disregard root problems too quickly. Tree roots grow mostly in the top 12" of soil, so even a trench 6" deep going near a tree can cut off many of it's roots. Being on a lot line, could there have been a gas line or other utility cut in in the last several years? Have you had septic work done, or septic problems? Are there other plants in the immediate area, like turf or shrubs, which may be exibiting trouble?
If I were called to your site and the root zone looked good, the next thing I would do is get to the part of the tree right where the dead needles meet the healthy needles. I would examine the trunk for borer exit holes, sap leaking, or lighting damage and look at the needles under a loop for fungal spots.
If there is evidence of borers, which is possible because of the recent stress of drought, you will need an arborist to confirm the diagnosis and possibly spray an insecticide.
If not, and you can gather a limb with both healthy and dieing needles, your local university extention office can try to culture any pathogens and report back in a few weeks. This costs about $15.