New Construction

Out-of-State Buyers Are Racing to Lexington

Look to Lexington to Invest in New Home Construction

The Lexington, KY real estate market is on fire and is quickly becoming one of the best places to invest in real estate in the Midwest. Home prices continue to surge, sales totals are hitting record highs, and the demand for housing remains strong. Residential real estate in Lexington is selling fast – with the median sale price up 9% compared to last year.

Like most of the top real estate markets, Lexington’s supply and demand issues are driven by having more buyers than sellers – making Lexington, Kentucky a seller’s market.

Median home prices increased from $215,000 in March 2021 to $234,000 in March 2022. With prices increasing, more homeowners are willing to sell, resulting in Lexington’s real estate market inventory increasing 20% YOY, while the number of new listings increased 18% YOY, according to data from the Lexington-Bluegrass Association of Realtors.

Nearly 48% of the city’s population are renters. And even though inventory may be up 20%, the population still continues to grow, meaning there still aren’t enough homes for first-time buyers. This provides a great opportunity for real estate investors with build to rent strategies.

Why Investors Should Consider Lexington

Several factors make Lexington, KY one of the top cities to invest in real estate in 2022 and one of the best rental property markets to watch. Located less than two hours from Louisville, Lexington is an attractive option for those looking for an alternative to big city living, yet with all the same modern conveniences.

The “Horse Capital of the World” is home to the University of Kentucky, which boasts one of the most storied basketball programs in NCAA history. The cost of living in Lexington is 10% lower than the national average, and Forbes ranks the city as one of the best places to retire.

Additionally, Lexington’s economy is diverse. Its business sectors include manufacturing, technology, education, and healthcare. Business titans like Amazon, Lexmark International, Lockheed-Martin, IBM, Trane, and UPS call the city home.

Job and population growth in the city have pushed the unemployment rate to be even lower than it was pre-COVID. The unemployment rate in Lexington is down to 2.8%, according to the most recent report from the U.S. Bureau of Labor Statistics (April 2022).

Insights for Real Estate Investors

Lexington’s new construction market is on fire, making it a prime option for investors interested in growing their real estate investment portfolio by way of new home construction. Data shows that the build to rent concept is a viable real estate investment option in this market. Home builders are struggling to keep up with demand, and local real estate experts predict that it will be three to five years before the inventory issue turns around. .

Construction companies are working to stay ahead of the demand for single-family homes (SFR properties) and multifamily units. Construction permits for multifamily units have risen 10% YOY as Lexington’s multifamily market mirrors the latest national trend toward more affordable multifamily options.

Investors are in the driver’s seat when it comes to Lexington real estate investments, as experts don’t expect the housing construction market to lose momentum this year. This being said, investors can’t afford to sleep on Lexington’s real estate investment market.

New Construction Loans for Investors

It’s important to find a private lender that has your goals and strategies in mind through the lending process.

When it comes to financing for real estate investors, Lima One Capital offers a robust suite of products designed to help every investor regardless of their investment strategy. As the premier lender for real estate investors, our goal is to help investors scale their business and close deals quickly.

Whether you’re looking for new construction loans to jump into Lexington’s construction boom or hard money construction loans to continue an existing project, Lima One can help. Our experienced lenders provide assistance and financing for Kentucky real estate investors.

Our clients have different investment strategies, so we have designed our loan options to allow us to cater to their individualized needs. Contact us today to discuss your next deal, or if you have a deal in hand, accelerate the process by applying now.