Higher interest rates, inflation, and increasing insurance costs impact all sectors of the Baton Rouge, Louisiana, real estate market, but local experts are still quite optimistic.
The demand for single-family homes remains steady to strong, office occupancy is improving, more industrial space is needed, retail vacancies are declining, and apartment rents are increasing.
For-sale residential had only 2.8 months of supply in late spring, still below 2019 levels, and homes continue to sell in a historically quick number of days. Fewer homes were built in Baton Rouge during the 2O1Os than in any decade back to the 196Os.
Because the state government and the petrochemical industry are sources of stability, the Baton Rouge office market is more insulated from issues at the national level. About 60% of local workers have returned to offices, compared with about 50% of the nation.
Higher interest rates and construction costs have caused a significant slowdown in multifamily construction, particularly for market-rate units. Flood insurance premiums have skyrocketed over the last two years after several hurricanes and FEMA’s risk rating adjustment.
Total nonfarm employment in the Baton Rouge area increased 4.6% from last year to 426,100 payrolls in May. There were approximately 3,400 more jobs in May compared with the previous month, and the local unemployment rate remained flat at 3.2%. May’s jobless rate is lower than it was this time last year when it stood at 3.3%. Zonda forecasts the region’s unemployment rate will finish the year at 3.1%.
The current population of the Baton Rouge metropolitan area is approximately 867,230 people and is projected to increase by 0.1% this year. There are about 355,690 households in the region, which is down 0.4% year over year. Forecasts show that current household formation is expected to increase by an annual rate of 2.7% through 2028. Incomes rose by 4.8% from the previous year to $62,616.
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