I have a deep affection for horror stories devoid of supernatural elements, the true form of horror lies in the subtle, microscopic-level details, and Penpal does a great job capturing this in its opening chapters. For the most part, the narrative progresses without any overt, "real" conflict until the final chapter, which, in my opinion, stands as the book's major flaw.
When discussing horror that excludes ghosts, clowns, aliens, or Cthulhu mythos, what I look for is a sense of uncanny intrusion. Consider this distinction: finding a stranger's footprints in the snow in front of your doorstep is mildly unsettling, but finding bare footprints in the snow within your private backyard is bone-chilling. Did you get the difference? In the first few chapters, the narrator as a kid remains unaware of the danger surrounding, it is only upon looking back as an adult that he recognizes those disturbing details
hinting that
he was being stalked by a local pervert who had captured his balloon containing a self-addressed letter. However, I was deeply dissatisfied with how the stalker was depicted almost like a romantically obsessed lover who went so far as to murder the narrator's best friend and crush out of jealousy. In reality, these types of criminals are selfish a$$h0l3s, they hope to increase their victims rather than devoting to one. (That's the reason of Father-stalker Theory)
Also, I might be missing some details, but...
There is absolutely no way the villain is the narrator's father, despite him being raised by a single mother from the very beginning. Had it been the father, the mother would have recognized his body in the final chapter. Furthermore, the probability of the narrator's father happening to catch that specific balloon is near zero. A narrative reliant on too many cheap coincidences becomes lame, conversely, a creepy stranger picking up the letter by chance is a perfectly reasonable and realistic dose of horror.