After a very strong first quarter, the market has dipped over the last three months. While market calculations are showing this as one of the worst quarters for sales in the last 10 years outside of the pandemic, the absorption rate is up to 6.6% and market volatility is at 0.44. In the month of June, there are a total of only 539 closings in Manhattan, which is 39% below the 10-year average for the month. Urban Diggs is reporting that supply is on the rise against the sales rate, which suggests that we may be heading towards a saturated market.
Other factors show that market futures may be up in the coming months. The weakening of the dollar is attracting more foreign national buyers, marking an uptick in this category for the first time since the start of the pandemic. Its effect is already visible as luxury sales above $5 million are the only sector to see an increase in signed contracts compared to the previous month. Additionally, mortgage rates have been slowly declining over the last few weeks, but not due to a change in the fed rates. I believe it is solely a tool being used by banks to support their crucial loan departments. We have also seen a strong uptick in buyer activity online, which is usually one of the first indicators that an increase in sales will occur in future months.
Personally, I feel that the summer market will be unbalanced. Well-priced properties are likely to move off the market quickly as ambitious buyers with urgency swoop in to purchase them. However, there will not be enough overall buyer demand for properties that are not priced well and in oversaturated markets. By September we should start feeling the uptick, and I believe this market will be our strongest since 2019, as buyers who have been sitting on the sidelines come back into the market and create a strong shift in demand.