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Monday, September 12, 2005


Real Estate Boom

So far, Baton Rouge Real Estate has risen up to 20%. This is great for some, sucks for others, but let me tell you something. Last night a radio talk show host was complaining that the rise in real estate was unconscionable. I'd like to politely disagree. Sure, we have people who would do anything for a place to call their own in Baton Rouge, especially considering how much we've grown in these past few weeks. But the town didn't foresee such a catastrophe, and didn't plan on this population growth. And so this is a simple supply and demand problem, you see. Demand for even a small appartment has grown considerabley (and see my other posts describing how quickly the housing market grew), but we just don't have the infrastructure. Not enough houses and appartments, as well as a steep increase in demand, means a steep increase in housing prices.

Will the Real Estate market go down? Sure. Development has already begun to give these evacuees a place to stay. Will they be here indefinitley? Perhaps, only in time will we know the answer to that. Because of that, the appartment market will remain high until it is obvious that many of these people will be staying in Baton Rouge. In the mean time, housing development is free to run wild. There are people in town who need the housing, so it's a very low risk investment to begin developing houses. On the other hand, the risk involved in building new appartment complexes is still much too high, though I'm sure that over the next few months we'll at least see enough units built to affect a change in the market.

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