Phil the Groundhog
Punxsutawney Phil, the famous groundhog from Pennsylvania, has once again emerged from his burrow to predict the weather. This weather-predicting rodent foresees if there will be another 6 weeks of winter or if spring is in the near future. Every year on February 2nd, the nation watches with much anticipation as Phil surfaces from his den. It is said that if Phil sees his shadow, the nation will be in for a longer winter; if Phil does not see his shadow, spring is just around the corner. This peculiar tradition, otherwise known as Groundhog Day, originated in France, England, and Germany back in the 1800s. German immigrants have since brought this tradition over to Pennsylvania. Today, Groundhog Day has grown into a full-on festival with a celebration schedule much like one at the PNE or Cloverdale Fair.
What a fun and entertaining way to welcome in spring, but how accurate is Phil? According to researchers, the rodent has an accuracy of 39%… that sounds about right. A meteorologist with today’s technology and forecasting equipment has a better weather-predicting record than a groundhog. But why is weather prediction so important, and why did the early settlers rely on this rodent for the weather forecast? The answer? This unusual weather-predicting tradition was a way to help farmers anticipate when to plant their valuable crops. Here is a breakdown into the groundhog’s logic for weather predicting:
It is a bad omen if the day is bright and sunny. A bright and sunny day translates into snow and frost lasting for another 6 weeks. Therefore, crops will have to be planted later in the season.
It is a favourable sign if the day is cloudy and dark. A cloudy and dark day translates into warm weather with rain that is able to thaw fields. Therefore, the soil will be ready for planting.
It is rather fascinating that with an accuracy rate of only 39%, the early settlers would plan their yearly planting from the influence of a silly rodent. What makes this even more fascinating is the weight that this planting decision held. Farmers depended on their crops for their livelihood and for their food stash for the year to follow. The fact that they trusted a rodent for all of this is quite astonishing. Phil the influencer!
All of this reminds me of the many homeowners and investors that make decisions in buying and selling real estate by influencers in the market place that have little or no impact on the bigger picture of the market. These influencers often confuse the homeowner, non-strategic investor, or even the uniformed real estate agent of when to buy, hold, or sell. They influence the market short-term, but these influences do not have a lasting impact on the market as a driver would.
Globally, a good example of an influencer in today’s world market is the coronavirus. The virus has literally shut down massive cities throughout China; however, this will pass and the influencer will not leave a lasting impression on the world market long term (or at least let us hope that the virus is contained and the effects are only short term).
Closer to home, influencers in the real estate market are newly implemented policies and taxes the Federal and Provincial governments introduce into the market place. Other influencers include changes to interest rates, ease or challenges of borrowing, inflation, activity of foreign investors and buyers in the local market, and even other good or bad opportunities in other investment vehicles such as the stock market.
Phil the groundhog did not see his shadow on February 2, 2020, so fortunately for us, that means that spring is just around the corner! See a clip here of Phil the influencer giving us the good news: https://www.cnn.com/videos/us/2020/02/02/groundhog-day-2020-punxsutawney-phil-prediction-vpx.cnn.
Looking at the Fraser Valley market, the influencers, and drivers, I, like Phil, also believe that our spring is just around the corner. If you would like to learn more about the influencers in the Vancouver and Fraser Valley market, as well as the predicted spring market that is fast approaching, please reach out to me.
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