BR Trends: Slower homebuilding; apartment glut

• Advocate business staff
• Published: Apr 17, 2008 - UPDATED: 2 p.m.

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Housing supplies in the Baton Rouge metro market are expected to drop in 2008 as builders continue slowing down new home construction, while the apartment and condominium sector struggles to absorb a big oversupply, industry experts said this morning.

Ed Kramer of Palm Springs Development LLC said the slow-down by builders will help the eight-parish market absorb an excess of homes that were built after predictions of a much higher post-hurricane population that didn’t pan out.

Commercial appraiser Wesley Moore of Cook Moore Associates warned attendees at the Greater Baton Rouge Realtors Association’s annual “Trends” conference that big apartment rental-fee increases since Hurricane Katrina will begin slowing down significantly.

Moore said that by the end of the year, the market will be swamped with about 5,000 new units, much larger than the usual 700 to 800 annually.

Complexes could be forced to compete with deep concessions to attract tenants, he said.

“I foresee a particularly tough, competitive period in the short-term,” he said.

However, Moore said that tightened financing for the residential real estate market could benefit the apartment sector by preventing some tenants from buying homes.

Kramer said the overbuilding of homes has been primarily in the higher price ranges, and he predicted existing home sales will have the edge.

He also said builders are responding to the changing market by shifting price ranges, home sizes and different mixes of amenities.