Real estate analysts expect the Baton Rouge area’s lingering slowdown from the August flood to end in the new year, with a stable commercial market and a rebound of retailers as homes are repaired and more disposable dollars become available.
Realtors, however, will be keeping an eye on interest rate hikes, oil prices and tax changes in the new year. Commercial real estate appraiser Sean McDonald, of Cook, Moore & Associates, says he’s tracking interest rate hikes.
“I would imagine it’s still gonna stay solid,” McDonald says. “The biggest threat we’ve got is interest rate hikes, and it’s gonna still be a pretty active year.”
Retail and office leasing were down this year, but the real estate market on balance was solid, says Jonathan Walker, senior commercial sales and leasing executive for Maestri-Murrell Real Estate.
While retail was down slightly, pockets in Baton Rouge saw a good bit of development. Towne Center and areas of Airline Highway saw growth, and Walker expects that to continue.
One uncertainty will be how many flood victims will get money to rebuild, Walker says. Those people are the ones who spend on retail, and the appetite for retail development could disappear in certain communities with large swaths of damaged homes.
McDonald says the housing market is still up in the air. There were a large number of gutted houses sold, and it is unclear whether those will be flipped for long-term housing. Inventory was low before the flood, and it remains to be seen how fast people will get back on their feet.
The state government is developing plans to spend the first roughly $1.6 billion in aid from the federal government, and expects to begin permanently repairing homes in March. But officials say that money is less than half of what is needed.
The election of Donald Trump as president could shore up some tax breaks for realtors, Walker notes, and the state budget and oil prices will have an impact on development.
“Having a president-elect in the real estate business is probably not a bad thing for people in our business,” he says. “Post-recession our economy has done pretty well. I would call our market stable more than anything. It’s not gangbusters … but nobody I’m talking to has really been slow.”
Justin Langlois, managing director of SVN | Graham, Langlois & Legendre, says the alignment of local boutique real estate groups with national firms has been a big trend in the industry. Since his three-person group aligned with SVN, the company has grown to 22 employees.
Langlois is working on a planned development led by Jason Eisenberg near LSU with Rouses anchoring a shopping center with several retailers. That type of development, with a large retailer or supermarket anchoring a development, is another trend in the industry, he adds.
“We see blue skies,” he says. “2016 was a banner year for a lot of people.”