Punxsutawney Phil predicts early spring…let’s start building!

Punxsutawney Phil not only predicted an early spring for the US, but was also overheard mentioning something about an early housing recovery across Minneapolis/St. Paul…  While Phil declined to elaborate more on his housing projections, leaving us all with questions, early numbers suggest he could be on to something…

Gopher

In case you missed it, February 2nd was Groundhog Day, and for just the 16th time in 125 years Punxsutawney Phil apparently did not see his shadow.  What on earth does that mean? In reality, it means absolutely nothing since as far as I know groundhogs cannot predict the weather and/or communicate said predictions.  However, I will humor Phil and his “Inner Circle” and look past the obvious holes in his story and play along.  

So early spring it is…

Fantastic! I know its early February and winter is far from over, but I for one am done with the sub-zero temperatures and 20 mph winds. It’s not the cold so much as it is the wind that slaps you in the face two seconds after you walk outside.  While Phil’s track record has been less than stellar over the past century, I hope he is right this year.  Am I complaining about the cold, yes I am. As a longtime resident of Minneapolis, MN I feel have earned the right to complain. Ok…ok, yes I know there was snow in Houston this past week and temperatures fell to the mid 20’s in Vegas, but really you guys complaining about winter would be like me complaining about how hot it is when it gets into the 90’s up here. Yep, not much sympathy…

But back to Phil, what do we really know about this guy? Great question.

  • Punxsutawney Phil is a resident of Punxsutawney, Pennsylvania
  • Phil lives in the town library with his wife Phyllis
  • A select group, called the Inner Circle, takes care of Phil year round
  • While the average lifespan of a groundhog is 10 years. Phil is 125 years old.
  • There has only been one Punxsutawney Phil
  • Phil is fed a sip of Groundhog Punch every year which magically lengthens his life for seven years
  • In 125 years Phil has predicted a long winter 109 times and early spring 16 times
  • Phil’s predictions have been correct 39% of the time
  • Phil and the town of Punxsutawney were portrayed in the movie Groundhog Day

 Will Phil’s predictions be right? Will we have an early spring?  Will the Minneapolis/St. Paul housing market experience an early recovery?

Here is what we know about 2010…

The Minneapolis/St. Paul MSA added just over 17,000 jobs, 4th best in the country. The unemployment rate sits at 6.5%, two and half points lower than the national figure. Home prices across Minneapolis/St. Paul were up 9.4% from the bottom.  3,384 new homes were built and 4,207 closed. Housing inventory dropped to a five year low hitting 6.1 months and lot supplies across the metro improved to just over 65 months.  Consumer confidence rose about 10 points across the region.  Can you say…recovery?

Here is what we know about 2011…

The first four weeks of 2011 have been some of the best in years for local homebuilders with sales traffic and contracts up considerably compared to 2009 and 2010. Bear in mind the government was giving away $7,500 and $8,000 respectively during this time last year so it’s encouraging to hear numbers are up. Homebuilders are also reporting great turnouts throughout newly introduced projects and are seeing strong numbers across some of their close-out communities.

Maybe I am jumping on Phil’s bandwagon a little too quickly, but I am in the housing industry and truth be told these last couple years have been a big bummer. So…yes…I am fine with putting a little faith in a groundhog; heck…he can’t be much worse than most economists or weatherman for that matter.  So 3,384 new homes were built in 2010, pretty crazy huh? Could we build 4,000 homes in 2011? Are 5,000 new homes possible? Yes!

All that being said…I reserve the right to change my forecast for the year towards the end of they year when I know for sure what happened.  Stay tuned.

(Ryan Jones, Director of Metrostudy’s Minneapolis/St. Paul Region, has been researching and analyzing housing markets for eight years.  He has prepared hundreds of market studies in various cities around the country for numerous product types.  His knowledge and experience combined with Metrostudy’s accurate and reliable information have enabled Ryan to advise many Minneapolis/St. Paul real estate firms in their risk assessment, decision making, and strategic planning.  He can be reached at (763) 398-8945 or ryanj@metrostudy.com)

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