Louisville is the largest city in Kentucky and one of the highest populated cities in the country. The Louisville rental market has received a lot of praise for its rental market and affordable housing for the past few years. According to most real estate experts in Kentucky and nationwide, the general forecast is that the Louisville rental market will outperform other markets in 2022.
The Louisville Metropolitan area is home to about 1.3 million, meaning hundreds of thousands of properties exist. Louisville is one of the fastest-growing cities in the country and is a desirable destination for real estate prospectors. The following is the Louisville rental market forecast for prospective renters, home buyers, real estate investors, and property managers.
A Larger Increase In Property Prices and Rental Rates
Property prices have risen dramatically in the United States over the past decade. The average price increase of real estate has been 62%, according to NeighborhoodScout, which amounts to an average annual increase of 5%. Despite looking high, the price increase has been average. In 2021, property price increases in Louisville were less than average.
However, Louisville is becoming a more attractive destination. So you can expect an above-average price increase in the city’s rental market from 2022 onwards. According to Zillow, the average home price in Louisville is $230,590, and the average rent is $1200 per month. Therefore, residents should expect to pay higher rents as rent increases to match rising property prices. You should especially expect an increase in rental rates if you live in:
- Russell East
- Smoketown Jackson
- Shelby Park
- Cherokee Triangle
- Paris town Pointe
- Germantown
- Central Business District
The average rent of a one-bedroom apartment in Louisville as of June 2022 is $1025. This is a 16% increase from the past year. Two-bedroom apartments are $1200, a 20% rise from the past year. The average rental rate for a three-bedroom apartment is $1468, which is a 12% increase from the past year. The rise in rents should be expected, with the uncertainty being the degree of increase.
Louisville Neighborhoods
According to rent.com, South Louisville has the most affordable neighborhoods in the city, where the average rent of a bedroom apartment is $475, much lower than the city average. Beechmont ($575 rent for a one-bedroom) and Bashford Manor (average one-bedroom rent of $659) are two other affordable neighborhoods in Kentucky.
On the other hand, the most expensive neighborhoods in Louisville include The Highlands, where the average rent for a one-bedroom apartment is $1749, and Phoenix Hill, where the average one-bedroom apartment rent is $1642.
The above areas will probably retain their standing as the most affordable or expensive neighborhoods. However, a rent rise is expected in all areas, but it will be higher in the more affluent neighborhoods.
Therefore, you should seriously consider the neighborhood when evaluating the Louisville rental market. Louisville neighborhoods, like most cities, have a spectrum of price ranges and amenities.
Louisville Will Continue Being a Landlord-Friendly City
Kentucky is a state that is very friendly towards landlords. So its largest city, Louisville, is the same way by extension. It is a trend both landlords and renters should expect going forward.
Kentucky allows landlords to file an unconditional quit notice if a renter is later with the rent, even once in the past six months. Therefore, tenant evictions can happen very quickly in Louisville.
Kentucky also gives landlords the license to hold deposits for up to 60 days by law, whereas most states do not even have deposit returns laws. Tenants can deduct rent for minor expenses if the landlord does not fix the issue within two weeks of notification. No statutes in Louisville address rent increase notices or rent grace periods. Landlords should use EZlandlordforms.com for tenant rental agreements, making it easy for landlords because they have a state-specific lawyer-written Kentucky rental agreement just for them. It will make the laws even more favorable for Louisville landlords. Landlords in Louisville can also recover attorney and court fees if they have to evict a tenant.
Rental Market To Encourage Tourism
Airbnb and other similar services have completely changed the face of tourism. In Kentucky, and by extension Louisville, the rental market has not traditionally been open to short-term rentals as in other states and cities. However, they can no longer deny the impact Airbnb is having on the rental market. Therefore, one of the more specific forecasts for Louisville’s rental market is that it will continue promoting tourism in the future.
Airbnb and other short-term rentals will promote the economy, benefiting the city and individual property investors, especially those who own short-term rentals. Louisville is encouraging the development of short-term rentals even in commercial and industrial areas of the city like Biutchertown.
Demand for short-term rentals in Kentucky has dramatically risen in the past five years and continues to rise. The demand has led property developers to allocate various condos in downtown Louisville to be used solely for short-term rentals. Granted, the city has to allow it, or else the property developer will be subject to substantial fines. There will be a limit on how many people can stay in the short-term rentals, and exceeding the number will also lead to fines. However, the increase in short-term rentals is an all but certain prediction of the Louisville rental market forecast.
The Louisville rental market is relatively stable and provides housing to hundreds of thousands of people. Like many other cities, it is undergoing some changes that are expected to continue, such as increasing rental rates and higher demand for short-term rentals. If you are considering moving to Louisville or investing in property in the city, the above forecast will assist you.
