Despite challenges such as rising interest rates, inflation, and insurance costs, local experts remain optimistic about the Baton Rouge real estate market. Tom Cook, an appraiser with Cook, Moore, Davenport & Associates, reassured attendees at a recent seminar that all is well, despite some concerning statistics.
In 2023, the total dollar value of home sales in metro Baton Rouge decreased by 24% compared to the previous year. However, Cook emphasized that the actual figures were not as dire as the percentages suggest. The median sales price remained relatively stable, the supply of houses increased slightly, and the number of days a house was on the market before selling also went up. Cook pointed out that the housing market is projected to remain steady in 2024.
On the other hand, Branon W. Pesnell of Marcus & Millichap expressed less optimism about the local office market, citing high vacancy rates nationally due to the shift towards remote work during the pandemic. However, he noted that office occupancy in Baton Rouge is slightly higher than the national average.
In terms of other real estate sectors, the multifamily, retail, and industrial markets are expected to remain consistent in 2024. Apartment vacancies are projected to stay in the 5% to 7% range, with rents remaining flat. Limited new construction is anticipated due to factors like interest rates and insurance costs.
Retail vacancies are expected to hover around 8% to 9%, with minimal rent increases. A notable trend in the local retail scene is the rise of “eatertainment” facilities, combining entertainment with dining options. Additionally, the industrial sector is expected to continue facing limited supply, with the petrochemical industry driving job growth.
One of the challenges hindering real estate development in the region is the difficulty in obtaining commercial insurance. Experts highlighted the need for reforms to attract more insurance companies to South Louisiana, drawing parallels to past efforts that successfully stabilized the workers’ compensation insurance market.
In conclusion, while there are challenges facing the Baton Rouge real estate market, experts believe that proactive measures, reforms, and continued monitoring of trends will help navigate these obstacles and ensure a stable market environment.