In Baton Rouge, Economic Fractures To Be Aware Of…
Yes, Baton Rouge does have a very diversified economy, hard lessoned learned in the 1980’s by too much reliance on oil employment. And, if one remembers, Baton Rouge weathered the most reccent 2008-2010 meltdow fairly well until 2011. We also had the momentum of Katrina to help us survive as long as we did.
Lafayette Louisiana is already hurting from low oil prices via two sources I’ve spoken with this month. Yes, Lafayette, New Iberia, Houma and other oil communities in Louisiana could have lots of trouble in all realms of their local economies.
Phil Crawford, of Voice of Appraisal, says Appraisers valuing homes need to know the pulse of major economic drivers, such as Oil, Gold, Stock Markets, Fed Policy, to know when markets turn and how that turn can influence our opinions of value. And, U.S. Housing makes up part of a Trillions of dollars in valuation of the U.S. economy.
From his weekly show and my vantage point in the South with Oil, there’s several scary factors coming together:
1.) China’s economic woes
2.) U.S. stock market down
3.) Oil headed to perhaps $20/barrel now that Iran sanctions have been lifted and they will be selling their own oil
4.) Big banks have 10’s of billions in energy exploration loans they expect some may default. Wells Fargo has $17 Billion of these loans.
5.) George Soros sees a global economic correction on the horizon.
It won’t happen all of a sudden but “could” hurt housing markets to some extent. Not trying to be overly negative in the above, but also not trying to stick my head in the ground and ignore the obvious. We still live in “Good Times” but as Rich Dad Poor Dad says, about every 8 to 10 years the U.S. Economy goes through a minor meltdown or correction and to be awake as those who value America’s housing (1986-1900, 2000 dotcom bust and 2008-2011 were meltdowns, about every 10 years).
Image Source: DS News