PULLMAN, Wash. — The Washington Center for Real Estate Research at Washington State University has released a Washington Real Estate Confidence Index for year-end 2003 that is marginally lower than the September index, but still reflects an industry that is very confident that 2004 will be a good year.
The composite index in December 2003 was .680, reports Glenn Crellin, WCRER director. Index value can range from .000 to 1.000, where .000 indicates absolute lack of confidence, and 1.000 indicates total confidence. Any score above .600 is interpreted as “highly confident,” he said. The September WRECI was .698.
WCRER computes confidence indexes for the primary real estate business specialties and geographic regions of Washington, based on a panel survey of experienced real estate practitioners and mortgage lenders who are members of leading professional organizations in the industry. These organizations co-sponsor the research.
“The participants in the survey have demonstrated their commitment to excellence and professionalism by taking advanced courses and becoming designated members of these professional groups,” Crellin said.
Among the primary business specialties, residential brokers, homebuilders and commercial real estate specialists recorded almost identical confidence scores (.716 to .719), reflecting high confidence in their markets in late 2003 and early 2004. Commercial practitioners, in particular, believe the strengthening economy will boost their business in 2004. In contrast to these three specialties, mortgage lenders, who had another outstanding year in 2003 due to both active housing markets and homeowners refinancing their mortgages at the lowest mortgage rates in 40 years, expect their business will slow a bit in 2004. But their confidence is still neutral, and they expect a solid but not spectacular year ahead (.464). Scores between .400 and .599 are considered “neutral.”
Real estate specialists throughout the state are confident about 2004, but the panelists doing business on the Olympic Peninsula seem especially upbeat (.748). Variations among the other regions were negligible. “The real estate and mortgage lending industries in urban or rural areas on both sides of the Cascades are looking forward to very strong business activity in 2004,” Crellin said.
Detailed statistics from the WRECI are available on the WCRER Web site at www.cbe.wsu.edu/~wcrer.
WCRER began conducting the WRECI survey with commercial specialists and mortgage lenders in December 2000. Gradually, additional business specialties were added. The WRECI was computed on a semiannual basis until December 2002, when the current semiannual schedule was adopted.