Luxury Real Estate Market Report | Kentucky, 2023

L U X U R Y

M A R K E T KENTUCKY | 2023

R E P O R T

TABLE OF CONTENTS BROKER’S LETTER ... 3 CENTRAL KENTUCKY ... 4 GREATER LOUISVILLE ... 8 NORTHERN KENTUCKY ... 12 LAND & FARM ... 16 2024 FORECAST ... 19 ABOUT US ... 23

B R O K E R ’ S

L E T T E R

Reflections & Anticipation

What. A. Year! From introducing Christie’s International Real Estate in Kentucky to managing market changes and post-COVID stabilizations, 2023 won’t soon be forgotten at Christie’s International Real Estate Bluegrass.

As we prepare for the highly anticipated 2024 spring and summer markets, it is our pleasure to share 2023 Kentucky luxury real estate trends and our forecast what lies ahead this year. Join us for a comprehensive look at four influential luxury markets within the commonwealth’s economy - Central Kentucky, Greater Louisville, Northern Kentucky, and Land/Farm.

Kentucky’s golden triangle of real estate economies continues to see rising prices and an influx of demand in the luxury markets. Although transaction volume decreased in 2023 overall, we predict steady growth in the number of properties sold, as well as a continued increase in appreciation across all price points, in 2024.

On a personal note, I am immensely proud of all that Christie's International Real Estate Bluegrass has accomplished since its April 2023 launch. Our team is dedicated to providing an unparalleled real estate experience for our clients, blending global prestige with a deep understanding of our local heritage. Expect exceptional properties, innovative marketing, and a professionalism synonymous with the Christie’s brand in the years ahead.

We invite you to be part of this journey as we continue to redefine luxury living across Kentucky. Thank you for your trust and support. Here's to 2024!

Sincerely,

Justin Miller, Principal Broker Christie’s International Real Estate Bluegrass jwmiller@cirebg.com

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C E N T R A L

K E N T U C K Y 4

C E N T R A L

K E N T U C K Y

INTRODUCTION Known for its scenic landscapes, iconic horse farms, and charming small towns, Central Kentucky is an attractive destination for those pursuing a high quality of life.

Lexington, the region's largest city, is dubbed the "Athens of the West" for its vibrant arts and education scene and has earned recognition as one of Niche’s “Best Cities to Live In” and “Best Cities to Buy a House” in 2023.

The two leading ultra-luxury ($1M+) subdivisions were the esteemed Lakewood neighborhood, recording five sales with an average of $2.3M, and the Reserve at Greenbrier with six sales averaging $2M.

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C E N T R A L

K E N T U C K Y

ANALYSIS When examining the luxury real estate market (property sales exceeding $700,000), Central Kentucky experienced a remarkable 129% surge in the number of properties sold in 2022 compared to pre-pandemic 2019.

The luxury real estate market in Central Kentucky seemed to have attained stability in 2023, recording $453 million in total sales—a modest 1.5% increase from 2022.

2022

2023

$500

$446.06

$453.08

Millions

$400 $300

$246.52

$224.69

$200

$228.38

$199.54

$100 $0

$700k - $1M

$1M+

Source: FLEX MLS

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Total Luxury Market

C E N T R A L

K E N T U C K Y

ANALYSIS The emerging luxury market ($700k-$1M) concluded the year with 280 properties sold, reflecting a 7.6% decrease in units and a 9% reduction in total sales compared to 2022. In contrast, the ultra-luxury segment ($1M+) saw a 9% increase in the number of properties sold and a 14.5% rise in total sales from the previous year, with a total of 158 properties successfully closed. Notably, both segments achieved average closing prices within 96% of the original listing price.

The $700k-$1M segment ended the year with 90 active properties, while the $1M+ market had 77 active listings heading into 2024. Remarkably, the $1M+ segment reported 37% of transactions as cash, while the $700k-$1M segment reported 31%.

Closed (2022)

350 300

303

Closed (2023)

Pending

Active

280

250 200 145

150 100 50 0

158

90

77

29

13

$700k - $1M

$1M+

Source: FLEX MLS

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G R E A T E R

L O U I S V I L L E 8

G R E A T E R

L O U I S V I L L E

INTRODUCTION Louisville, a picturesque waterfront city along the Ohio River, is Kentucky's largest urban center. This vibrant cultural metropolis is perhaps best known as home to the Kentucky Derby and some of the world’s most famous bourbon distilleries.

Beyond the racetrack and the barrels, Louisville has earned national recognition for its livability. In 2023, Louisville was named by Travel + Leisure Magazine as the #4 Most Beautiful and Affordable Place to Live and the #9 Best Foodie City.

Greater Louisville’s standout neighborhoods include Harrods Glen, where two properties sold with an average sales price of $2.5M, and Elmcroft, where three properties sold at an average sales price of $1.8M. Other notable neighborhoods are Cherokee Gardens and Poplar Woods Estates, both recording six property sales with average prices of $1.4M and $1.3M, respectively.

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G R E A T E R

L O U I S V I L L E

ANALYSIS In 2023, Greater Louisville’s overall luxury market achieved a total of $245M in sales, a 1.3% increase year-over-year.

The area’s ultra-luxury ($1M+) segment experienced consistent growth, concluding the year with 199 properties sold - a 4.7% increase over 2022. In contrast, the emerging luxury market ($700k-$1M) reported 442 properties sold, showing no change from the previous year.

2022

2023

$700

$637.03

$645.02

$600

Millions

$500 $400

$357.45

$357.24

$300

$287.78

$279.59

$200 $100 $0

$700k - $1M

$1M+

Source: FLEX MLS

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Total Luxury Market

G R E A T E R

L O U I S V I L L E

ANALYSIS The influence of high interest rates was evident in the $700k-$1M market, where 26% of transactions were reported to be cash, compared to a significant 39% in cash transactions observed in the $1M+ segment.

With interest rates gradually declining and conventional mortgage loan limits increasing, we anticipate a gradual ascent in the $700k-$1M market.

Closed (2022)

500 442

Closed (2023)

Pending

Active

442

400 300 200

190 122

100 0

199

75 18

14

$700k - $1M

$1M+

Source: FLEX MLS

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N O R T H E R N

K E N T U C K Y 12

N O R T H E R N

K E N T U C K Y

INTRODUCTION Northern Kentucky, nestled along the banks of the Ohio River, is celebrated for its unique blend of scenic beauty and historic architecture. Completing the “Golden Triangle” of regional hubs between Louisville, Lexington, and Northern Kentucky, this area is home to a blend of iconic attractions and local treasures.

The region’s strategic location offers seamless access to Cincinnati, Ohio, and has been a key factor driving several decades of momentous growth.

Northern Kentucky’s notable neighborhoods include Canterbury Woods, boasting three record sales with an average price of $1.5M, and Country Squire Estates, where six luxury sales averaged $1.1M.

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N O R T H E R N

K E N T U C K Y

ANALYSIS Northern Kentucky's real estate market experienced a significant surge in luxury properties sold, reporting a 231% increase since 2019, surpassing the growth rate of the luxury market in Central Kentucky.

In 2023, the area’s luxury real estate market began to plateau and achieved stability. The emerging luxury market ($700k-$1M) had 168 properties closed with 51 still active, while the ultra-luxury ($1M+) market concluded with a total of 44 recorded sales and 38 listed properties going into 2024.

2022

2023 $195.81

$200

Millions

$150

$130.18

$199.16

$134.72

$100 $65.63

$64.44

$50

$0

$700k - $1M

$1M+

Source: FLEX MLS

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Total Luxury Market

N O R T H E R N

K E N T U C K Y

ANALYSIS Interestingly, the emerging luxury market achieved a remarkable 97% average sale price versus the original listing price, whereas the ultra-luxury market experienced properties selling at an average of 93% of their initial list price.

Overall sales in both segments remained steady, aligning with 2022 number of listings sold and average sales price.

Closed (2022)

200 165

Closed (2023)

Pending

Active

168

150

100

51

50

45

44

38

22

0

2

$700k - $1M

$1M+

Source: FLEX MLS

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L A N D

& 16

F A R M

L A N D

&

F A R M

INTRODUCTION From the Appalachian Highlands in the East to the Coastal Plains of the West, the diversity of Kentucky’s landscape offers opportunity for everyone. However, the rolling hills of the Interior Low Plateaus is where we see most land sales in the luxury market ($700k and above) take place.

In 2023, this physiographic region included the areas between Louisville, Lexington, and Northern Kentucky and saw nearly 27,000 acres sold, totaling $292.4M, a 22% year-over-year increase.

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L A N D

&

F A R M

ANALYSIS Matching the strong demand seen in Kentucky’s residential market, luxury land listings experienced properties selling at an average of 92% of their initial list price. Land and Farm properties experienced the most significant influence of cash transactions with 55% of closings being in cash.

Bourbon County led in total acres sold in the luxury land space with 3,123 acres, followed by Woodford at 2,489 and Shelby at 2,151. Woodford County saw a 36% increase year-over-year in total volume of luxury land sales, where 11 properties sold averaging $32.3k per acre, totaling $50.5M. Fayette and Shelby are two other leading counties, finishing at $39.7M and $38.7M, respectively.

2023 Volume

Volume (Millions)

$80

$80

$77.21 $68.41

$60

$60

$50.58

$40

$32.47

$31.43

$38.69

$36.92

$40

$35.19

$32.28

$20

$39.79

$21.80

$20

$19.88

$0

Bourbon

Shelby

Woodford

Source: FLEX MLS

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Fayette

$0

SP/Acre (Thousands)

2022 Volume

2024 FORECAST

by Rusty Underwood, Owner/CEO and REALTOR

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R E T U R N

T O

S T A B I L I T Y

Although 2023 experienced a decrease in the volume of units sold market-wide, both locally and nationally, the stability of pricing and appreciation continued to hold strong in the luxury markets. For 2024, we predict a continued return to normalcy and a slow climb back to stability in our level of available housing inventory.

Consumers had a strong reaction to the rapid rise in interest rates in 2023, which led to a snowball effect in our available homes for sale. Homeowners with lower interest rates became reluctant to sell without identifying a property to buy.

Continued demand for housing and limited availability for new construction further exacerbated the limited housing selection.

While the increase in interest rates was swift in 2023, the fluctuation of rate offerings remained in line with historical averages. As interest rates have stabilized and even decreased heading into 2024, acceptance of the rate norms will contribute to consumer's willingness to move. As a result, we expect to see a large uptick in transactions between buyers and sellers.

The Golden Triangle, in particular, has experienced an increase in investment from out-of-state buyers post-COVID. We expect the stimulation of mid-sized cities across the country to continue into 2024, creating additional demands.

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Cash in the marketplace is anticipated to remain quite prevalent, particularly in the luxury markets, which will contribute to stability in values and prevail against any decline in demand created by elevated interest rates. In coordination with the already low inventory in the ultra-luxury and farm sectors, we expect this demand to contribute to a steady appreciation in value.

Stabilization of the national economy, market conditions of an election year, continuing regional growth, and decreasing interest rates will all contribute to an increase in the number of homes sold and an increase in median sales price in 2024. The combination of these market indicators point towards continued health in real estate investments and our fundamental belief that owning real estate is the foundation of building wealth.

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A B O U T

U S

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