JACKSONVILLE, FL – Our analysis of the Per-Capita Personal Income and House Price Index in Atlanta, Georgia, from 1980 to 2020, focuses on year-over-year (YoY) percentage changes. The data reveals a moderate positive correlation, especially with a one-year lag, between these metrics. This suggests that an increase in personal income could lead to a rise in house prices the following year. These findings provide strategic insights for multifamily real estate investors, particularly regarding timing market entry and exit and assessing risks.

Our analysis of the Per-Capita Personal Income and House Price Index in Atlanta, Georgia, from 1980 to 2020, focuses on year-over-year (YoY) percentage changes. The data reveals a moderate positive correlation, especially with a one-year lag, between these metrics. This suggests that an increase in personal income could lead to a rise in house prices the following year. These findings provide strategic insights for multifamily real estate investors, particularly regarding timing market entry and exit and assessing risks.

Statistical Significance

A correlation coefficient above 0.50 between YoY changes in Per-Capita Personal Income and the House Price Index indicates a statistically significant relationship. This signal, rather than noise, warrants further attention. When we apply a one-year lag to the house price index, the correlation becomes even clearer. This suggests that changes in per capita income can predict house price index movements one year into the future, indicating a real-time relationship.

Implications for Multifamily Real Estate

The observed correlation suggests a lagged effect where an increase in personal income one year could predict a rise in house prices the following year. For multifamily properties, higher house prices typically lead to increased rental demand. This insight allows investors to better time their investment decisions and anticipate rent hikes, providing a strategic advantage in the market.

Risk Assessment

This data-driven approach is a crucial component of our comprehensive framework for real-time risk assessment. While these specific metrics offer valuable insights, they form part of a larger set of indicators we monitor to adapt to market conditions effectively.

The moderate positive correlation between YoY changes in Per-Capita Personal Income and the House Price Index is a valuable data point among the various leading indicators we analyze. Although correlation does not imply causation, ignoring this signal in the complex and fluctuating real estate market would be a missed opportunity for strategic insight.

For a deeper dive into the analysis and to explore the detailed data and methodology behind these findings, read the full article here.

About Nuvo Capital Partners

Nuvo Capital Partners is a niche market-focused multifamily private equity firm operating throughout the Southeastern United States. As a dedicated sponsor (General Partner), we specialize in institutional quality real estate investments within these regions. Our team, with a combined 25+ years of experience, has facilitated over $700M in transactions (10,000+ units). Delivering a transparent investment process, we provide our investors with access to high-quality real estate opportunities, while also ensuring integrity throughout. Our commitment extends to providing monthly, quarterly, and yearly in-depth reporting for our valued investors. To learn more, visit nuvocapitalpartners.com.

If you are interested in learning more about Nuvo Capital Partners and the investment opportunities we are currently exploring, please feel free to contact us here.