This final post will conclude my analysis of the trends for the top ten most populous cities in Kentucky. In previous posts we have considered the three most important factors that affect demand for commercial real estate – population, employment, and income trends. The chart below summarizes the trends in these three characteristics for each of these cities:
While evaluating these trends, it’s important to keep in mind that the data cannot be evaluated in a vacuum. While Georgetown and Elizabethtown might demonstrate the strongest population growth, these cities are small relative to Louisville and Lexington exposing them to economic risk not associated with the larger cities with more diverse economies. Population figures might also be skewed, depending on corporate annexing or other factors I’ve not taken the time to evaluate.
In either case, I’m a big picture guy and looking at these figures from a broad perspective, if I was forced to make a choice where to spend my hard earned cash, I’m going with Lexington first – followed by Louisville, Bowling Green, Richmond, and Florence. The next four are up for grabs. But the one place I would avoid – Covington. I’m not picking on Covington but their demographics are, well, less than stellar.
You may ask yourself why…why does this matter? Maybe an example will help.
I have a friend who is a builder. Based on the totally unrealistic population projections made by a certain nearby municipality, my friend invested hundreds of thousands of dollars building a subdivision there. Now the lots sit vacant with no real prospects in sight. Now he spends thousands each month in interest. Are you aware of the effect that financial strain can have on a person?
Conversely, this analysis should prove useful for those looking for opportunities to invest.