Is there a direct connection between Puxsutawney Phil and the housing market? Some may not think so, but read on to hear what chief economist of realtor.com®, Jonathan Smoke has to say.
The infamous groundhog Pennsylvanias Punxsutawney Phil may not only have the power to predict how many more weeks are left to winter but also the ability to predict the start to housings busiest time of year.
Phil didnt see his shadow on Tuesdays Groundhog Day, which, if superstition holds true, means that winter will be shorter this year, with a warmer February across the country.
If the groundhog is correct, Jonathan Smoke, realtor.com®s chief economist, says, that could spark an early start to the spring homebuying season.
Over the 47 years for which we have sales data, when Februarys temperature was above average, February home sales showed growth over the prior year 60 percent of the time, Smoke writes in his most recent column at realtor.com®.
But what matters more than the weather is the health of the economy and the demand for housing, Smoke writes.
When the market is strong and temperatures are cold, we still typically see growth, he writes. But when we have a strong market and warmer temperatures in February, we are far more likely to see growth.
And when the housing market is strong like it is now, and Phil doesnt see his shadow, February sees an average 11 percent year-over-year increase in existing-home sales, Smoke continues. Thanks to Punxsutawney Phil, we know that the spring housing market starts early this year and buyers and sellers had better be ready.
Source: Guess What? Spring Home Buying Starts Now (Thanks, Punxsutawney Phil!) realtor.com®