On Thursday the discussion about how the plunging price of oil could affect the Baton Rouge Real Estate market. Some of the predictions that were made include the fact that the real estate market in the area could see a decrease in new apartments, a lower number of office spaces being used by local engineering firms, but could also see an increase in sales for local retailers.

Falling oil prices may lead to a slowdown for the petrochemical industry. This would reduce the amount of new jobs that were expected to be added in Baton Rouge during the next couple of years.

Apartments

With the prospective jobs potentially being reduced this could affect the construction of new apartments, which was largely based on the Baton Rouge metro area adding roughly 18000 new jobs by the year 2016.

In 2015, there is expected to be 1666 apartment units completed. This includes developments such as The Exchange and the District, which added just over 600 new units already this year. The apartment market of the city remains quite healthy with the vacancy rate being roughly 5.5% in the fall of 2014. The national vacancy average was 4%. Rent for apartments has increased by 6% since 2010.

Office Market

The fall of oil prices could affect the office space market as well. If oil prices stay low, many local engineering firms may start to lay off some of their employees and downsize the amount of space they are currently using.

In 2014 the occupancy rate for offices was at 89.3% and is expected to grow to 91% in 2015. The big if factor for the office space real estate market is oil prices.

Industrial Real Estate Market

The industrial market for real estate is actually quite good, but there have been some stops because of the quick drop of oil prices. There are several firms that have been making adjustments in order to deal with the huge drop in the price of oil that occurred just over the past year.

Companies that do not currently invest in the city may want to take this time to start investing in industrial property in the area.

Retail Market

One of the more positive notes about the drop in oil prices is that it could mean big savings for families. An average family could save from $1500 to $2000 per year because of the lower price of gas.

While there are some oil drilling states, including Louisiana that are going to be a bit exposed because of the lower gas prices, these lower gas prices as well as continued growth in jobs across the country is going to help boost the real estate market throughout the nation.

The real estate market conditions are continuing to approve from a low base. The savings from the lower gas prices have boosted the retail market both in Baton Rouge as well as nationwide. The local retail market has not seen these levels since before the great recession.

In the past year the price of retail rental space for metro Baton Rouge has increased from $16.85 a square foot to $17.73 a square foot. During this time the vacancy rate also dropped from 10.6% to under 8%. This is closer to the national average vacancy rate which is 7.3%. Retailers including grocery store chains are starting to expand with companies becoming pickier about their locations.

Juban Crossing is one area that has seen recent retail activity. In the past year there has been 375,000 sq. ft. of retail space built in the shopping center with additional space being added this year.

Homes

The residential real estate market is quite healthy. There has been a decrease in the number of houses available and an increase in the demand for residential properties. There has been a healthy increase in prices, but it is not a bubble. The percentage of closed sales for homes increased by 3% and the number of pending sales is up nearly 14% over the first quarter from 2014. One of the strongest markets in the area is Livingston Parish.

Overall, Baton Rouge is seeing job creating and an increase in consumer confidence, which is creating a high demand for housing.