Groundhogs Know Best: Spring Buying Is On
The infamous groundhog – Pennsylvania’s 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 housing’s busiest time of year.
Phil didn’t see his shadow on Tuesday’s 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 home buying season.
“Over the 47 years for which we have sales data, when February’s 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 doesn’t 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® (Feb. 2, 2016)