The US property market has been among the hardest hit by the global economic downturn, with questions inevitably being raised over the validity of any potential investment in the country. As a result, it may be expected that the supply of homes available for sale will outweigh the demand, as investors are hesitant to enter the market.

However, it seems that buyers have in fact been taking advantage of lower prices by snapping up many of the properties on offer, resulting in the National Association of Realtors (NAR) observing a shortage in some areas. It comes after the Mortgage Bankers Association identified a rise in applications for home loans in the country, adding weight to suggestions that signs of a recovery are being seen.

The NAR figures revealed a rise in sales of existing homes for a fourth consecutive month - the first time this has occurred since June 2004. A total of 5.24 million units were sold - on a seasonally-adjusted basis - in July, this representing a 7.2 per cent increase from the previous month. It also marked a five per cent rise on the same period in 2008, marking the first annual growth since November 2005.

Chief economist at the organisation Lawrence Yun said the data is cause for encouragement, with a greater degree of affordability thought to be contributing to the rise in sales. And should the trend continue, it could mean those who have invested in US property begin to see significant returns.

"The housing market has decisively turned for the better," said Mr Yun. "Because price-to-income ratios have fallen below historical trends, there are more all-cash offers. In some recovering markets like San Diego, Las Vegas, Phoenix and Orlando, the demand for foreclosed and lower-priced homes has spiked and a lack of inventory is becoming a common complaint."

SOURCE: The Move Channel