The state best known for thoroughbred horse breeding has recently been affected more than most states by the mortgage meltdown and the economic collapse of the early 21st century. From Lexington to Louisville, Bowling Green to Owensboro, Covington to Richmond and Hopkinsville or anywhere in between, there is a trail across the states of Kentucky of foreclosures. In every major metropolitan area and farming community mortgage companies and banks have reposed homes once owned by the families of the Bluegrass State.
The economy of Kentucky is unlike most of its sister states in that Kentucky has intentionally not diversified out of the agrarian culture. While other states have moved toward a high tech economy Kentucky has maintained its focus on farming and has mostly branched only into manufacturing. Ford, Chevrolet, Cadillac and Toyota now all have assembly plants in Kentucky. Kentucky currently ranks fourth in the nation for automotive assembly and combined with its agricultural output the state has a state gross product of $146 billion. Coal production is still a large portion of the economy and its eastern coal mines rank among the nations most productive. Perhaps because of this lack of economic diversity Kentuckians have seen an unemployment figure that is far higher than the national average. Unemployment, a major contributor to foreclosures is at 10.7% and relies on only a few industries to help it recover.
This is not to say that Kentucky could have done anything to defend itself from the mortgage meltdown which was closely followed by the global recession that has effected every Country, State and business around the world. In fact Kentucky with its focus on only a few major industries is betting on the recovery of the automotive industry by building the best selling cars and trucks in the county.
This is good news for real estate investors and foreclosure buyers so long as they maintain their financial focus on the metropolitan areas that are most likely to come back from economic disaster first and strongest.
Since 25% of all Kentuckians live in the Greater Louisville Metro Area and 12.5% of the population of the state lives in Lexington it is clear that the population of Kentucky is not evenly spread throughout the state and therefore it is important that the wise investor study the current population and recent population of an area before purchasing a foreclosure. The more rural the region the more difficult it will be to either resell the investment home or rent it to a credit worthy tenant.
Home ownership in Kentucky is 70.8% which is above the national average, indicating that home ownership has been and will continue to be a source of pride for the citizens of Kentucky. Foreclosures rank among the highest in the county as Kentucky ranks 10th highest in the nation for foreclosures per housing unit. This is good news for investors who wish to buy and resell so long as the investor buys in the more urban areas of the state.
