Home Mortgage Alliance Corporation (HMAC)

Strike up the band: Punxsuatawney offers more than weather forecasts

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Published Date 2/6/2024

When Realtor.com’s Clare Trapasso wrote The Punxsutawney Effect: Why a Home Price Surge in Phil’s Hometown Offers Hope for the U.S. Housing Market she may not have seen the movie Groundhog Day anytime recently. If she had, we’d be seeing springtime already —over and over and over again. Not a bad thought in the dead of the 2024 winter.

Why? The nation’s most famous groundhog, Punxsutawney Phil, made headlines last week 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. While home prices in the small rural town have more than doubled over the past four years, actual current prices have remained relatively affordable.

As it is elsewhere in the U.S. right now, Punxsutawney has more buyers than homes for them to buy, making it a rousing sellers’ market. 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.

It’s all relative, however. Back in pre-COVID 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, with much of that taking place between spring 2021 and spring 2022, slowing down only when mortgage rates climbed.

In Pennsylvania in general, prices rose about 28% over the same period as compared to the national average of 37%. So what is Punxsutawney’s secret? It’s not just the groundhog. It's a bidding war. Out-of-state buyers (from states such as Utah, Michigan, and California) were attracted to the lower prices, proximity to family members living nearby, and/or investment opportunities.

Amenities abound in the town as well, including the Punxsutawney Area Hospital and the Indiana University of Pennsylvania campus in Punxsutawney, which offers certificates in the culinary arts. Punxsutawney may have just 5,636 residents (July 2022), according to the U.S. Census Bureau, but it boasts dozens of groundhog statues.

Who knows? With falling interest rates and the prediction of early spring, old Phil might be smiling and dancing to the Pennsylvania Polka for a good, long while.

Realtor, TBWS

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