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onstruction on the Benton at Magnolia Woods subdivision continues near Highland Road in Baton Rouge, La. Local experts predict a stagnant real estate market in 2025 due to elevated interest rates, inflation, and rising insurance costs.

    Speakers at the Trends in Real Estate seminar said rents will remain steady in retail, office, and multifamily sectors, while home construction will plateau. Tom Cook, an appraiser with Cook, Moore, Davenport & Associates, attributed the decline in new homes permitted to interest rates, stating that he doesn't see a change on the horizon.

    In 2024, Ascension and Livingston parishes saw a significant drop in new home permits, while East Baton Rouge Parish experienced a 58% increase. The metro area's total permits rose by 14.7%, but the dollar value of homes sold decreased from $3.79 billion in 2022 to $2.65 billion in 2024.

    The industrial market has shown improvement, with tight inventory and increased rental rates of nearly 4.7%. Evan Scroggs of Lee & Associates expects demand for warehouse and distribution space to rise due to recent economic development wins, such as the Hyundai Motor Group's planned steel plant in Donaldsonville.

    Scroggs emphasized the need to build more industrial space in metro Baton Rouge, citing 47 businesses that dropped plans due to insufficient space. Bill Sanders of Lee & Associates noted an improvement in the office market, with a rise in occupancy rates for Class A office space and a "flight to quality."

    However, uncertainty surrounds One American Place, which was seized by the East Baton Rouge Sheriff's Office last year. Sanders predicts it may take several years for the building to find a buyer, potentially leading tenants to seek more stable options.

    Brian Andrews, executive director of the Real Estate Institute at LSU's E.J. Ourso College of Business, acknowledged the market's uncertainty but advised against overreacting, stating that things will eventually improve as markets move in cycles.