There are nearly 6,000 apartment units that planned to be built in metro Baton Rouge by the end of the year, a number that has one person who tracks the multi-family housing market concerned.
“We could end up with a glut of units,” said Wesley Moore, with Cook, Moore & Associates. Moore discussed the state of the local apartment market at the Trends in Real Estate seminar Thursday morning.
Moore said the Capital Region absorbed 6,300 apartment units in the wake of Hurricane Katrina, which caused a population shift.
Apartment construction is being driven by forecasts of job growth. According to estimates from the Baton Rouge Area Chamber and LSU economist Loren Scott, the Capital Region is set to add 18,000 jobs over the next two years.
Moore said the job gains could be softened by declining crude oil prices and the $1.6 billion shortfall in the state budget, which could hurt state and LSU employment.
Currently, the apartment market remains healthy. The vacancy rate was 5.5 percent during fall 2014, just below the national average of 4 percent. Rents have gone up 6 percent since 2010.
But Moore said he expects vacancies to rise over the next year and rental rates to flatten because of the new units in the pipeline. Complexes will also offer incentives such as free TV sets to attract tenants.
This year, 1,666 units are expected to be completed.