The multifamily sector in Louisville, Kentucky, is expected to reap the benefits of a hiring surge driven by major employers such as UPS, General Electric and Ford, according to analysts.
Hiring by those and other companies is projected to lead to a 2.1 percent increase in employment as approximately 13,000 new positions are created during 2012, data and analytics firm Marcus & Millichap reports. While that amounts to fewer new jobs than last year, it remains a significant number, and the firm predicts many of them will attract residents to top-tier apartments.
Rental property management firms and investors in that portion of the sector should see vacancies fall to between 3 and 4 percent, while overall vacancies drop to about 4.1 percent. This should provide the leverage for asking rents to be increased by 2.9 percent to $679 per month, while effective rents grow 3.8 percent to $658, according to the firm.
Rent growth in the metro area is below the national average, Marcus & Millichap reports. Rent growth may be slowed in 2013 and beyond, as developers are acting on current demand. Construction projections indicate 300 new apartment units will be started this year, which Marcus & Millichap suggests might be enough to have a noticeable impact on vacancies and rents.