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The nation’s most famous groundhog, Punxsutawney Phil, made headlines on Friday when he didn’t see his shadow, indicating spring is just around the bend.
But what might be even more remarkable is the real estate market in Phil’s hometown of Punxsutawney, PA, about 90 minutes northeast of Pittsburgh. Home prices in the small rural town, immortalized in the 1993 Bill Murray flick “Groundhog Day,” have more than doubled over the past four years. Yet prices have remained relatively affordable.
“There’s a shortage of homes on the market. We have more buyers than we have homes for them,” says local associate real estate broker David Fetterhoff, of Berkshire Hathaway HomeServices. “So it’s a seller’s market and sellers can ask for more.”
The median home list price in the town was just $216,000 in January, according to the most recent Realtor.com® data. That was just over half of the national price tag of $409,500.
However, prices have been steadily rising since the COVID-19 pandemic. In January 2020, the typical home in the town was on the market for $79,000. Over the past four years, prices* have shot up more than 173%, according to an analysis of Realtor.com data. Much of the price growth happened between spring 2021 and spring 2022 and then slowed as mortgage rates climbed.
In Pennsylvania, prices rose about 28% over the same period. Nationally, they were up nearly 37%.
So what is Punxsutawney’s secret? It’s not just the groundhog, says Fetterhoff. The housing shortage also plays a part.
“You have a lot of multiple offers,” says Fetterhoff. “If people really like the home, they’re going to bid higher than they normally would.”
He’s seen more out-of-state buyers over the past few years as well, attracted to the lower prices, proximity to family members living nearby, or investment opportunities. Buyers have come from states such as Utah, Michigan, and California.
“Our prices are much better than they are in those states,” he says.
Fetterhoff also touts the town’s amenities, including the Punxsutawney Area Hospital and the Indiana University of Pennsylvania campus in Punxsutawney, which offers certificates in culinary and baking and pastry arts.
Punxsutawney had just 5,636 residents in July 2022, according to the U.S. Census Bureau.
The groundhog and the popular film probably haven’t hurt the town’s real estate fortunes either.
“We have visitors come throughout the year to see the groundhog statues all over town,” says Fetterhoff. “Punxsutawney became more famous when they did the film. It boosted interest.”
The local real estate market slowed down when mortgage rates shot up, similar to much of the rest of the country, he says. But as rates have been coming down since mid-December, the market has begun picking back up.
“It is slowly coming back,” he says.
Who knows? Maybe the falling interest rates signal a busy spring housing season will arrive a bit earlier for us all.
* As there are fewer homes for sale in Punxsutawney, home prices can be prone to larger swings.
The post The Punxsutawney Effect: Why a Home Price Surge in Phil’s Hometown Offers Hope for the U.S. Housing Market appeared first on Real Estate News & Insights | realtor.com®.
