LOUISVILLE OVERVIEW

Economy

Units Completions By Quarter

1| Prior to the pandemic, Louisville/Jefferson County’s real gross metropolitan product grew at an average annual rate of 2.0% from 2015 to 2019. During that same five-year period, job growth averaged 1.5% annually, with roughly 9,800 jobs added on average each year. In 2020, COVID- 19 mitigation measures and limited business activity caused the local economy to contract as much as 8.0% year-over-year in 2nd quarter. 2| In 2022, the metros inflation-adjusted economic output contracted 0.6%. At the same time, the metro recorded a net gain of 28,200 jobs, expanding the employment base 4.2%. 3| Louisville/Jefferson County’s unemployment rate in November 2022 declined 0.7 points year-over-year to 3.0%, below the national average of 3.4%. 4| During the past year, job gains in Louisville/Jefferson County were most pronounced in the Education/Health Services sector followed by Leisure/Hospitality Services.

Q1 2022 Market Snapshot

1| Over the past five years, annual change in effective asking rents in Louisville/Jefferson County ranged from a decline of 0.1% to an increase of 11.9%.

2| In 4th quarter 2022, effective asking rents for new leases were up 8.5% year-over-year. That annual rent performance was almost double the market’s five-year average of 4.4%.

3| In 4th quarter 2022, annual effective rent change registered at 8.4% in Class A units, 9.9% in Class B units and 6.5% in Class C units. 4| Among submarkets, the strongest annual rent change performances over the past year were in Southeast Louisville (11.4%) and Southwest Louisville (9.8%). The weakest performances were in Central Louisville (6.7%) and Northwest Louisville (6.8%). 5| As of 4th quarter 2022, effective asking rental rates in Louisville/Jefferson County averaged $1,154 per month, or $1.219 per square foot.

Occupancy

1| Occupancy in the Louisville/Jefferson County apartment market has ranged from 94.4% to 97.4% over the past five years, averaging 95.5% during that period. Over the past year, occupancy lost 1.7 points, with the 4th quarter 2022 rate landing at 95.0%. 2| Product classes in Louisville/Jefferson County, 4th quarter 2022 occupancy registered at 93.4% in Class A units, 95.0% in Class B units and 96.8% in Class C units. Occupancy in Class C product was generally tightest over the past five years, averaging 96.6%. 3| Among submarkets, 4th quarter 2022 occupancy was strongest in South Central Louisville and Northwest Louisville. The weakest reading was seen in Central Louisville at just 93.6%.