US home buyers told to look to local market

Those keen to buy property in the US may benefit from studying closely how the market is doing in the local area they are looking at.

Writing for the Wall Street Journal, expert James Hagerty said that one clue is to ask a local estate agent what the current rate of sales is compared to the supply and use this to calculate how long it would take to clear the stock on this basis.

If the average figure is over six months then sellers may have to cut prices, he noted.

Such a move may help buyers find bargains to purchase.

Another tactic is to see how many for sale signs there are in a neighbourhood, with a large number of vacant lots being a bad indication.

Last week, the National Association of Realtors (Nar) tipped the market to see a recovery, with growing numbers of first-time buyers leading the way.

Nar chief economist Lawrence Yun predicted a 13 per cent rise in sales next year, stating: "A steady draw down of inventory will help home values to turn positive in 2010."

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