James Call: Expert. Smart! Sassy! Government employed!
Reader "Mandy" asks: Should poor people like myself start investing in property now that prices are down? Or is now the worst time to apply for a loan?
In a word, nope. Don't invest yet. Home prices have not hit bottom. They should be hitting total rock bottom most likely in 6 months. The question is, will you have a job in 6 months? Maybe if these central banks get their shit together this weekend and the TED spread narrows, businesses will stay afloat. But don't count on having a job 6 months from now if you're working in a non-essential business sector.
However, yeah, soon... 3-9 months from now... good time to invest in home prices if you got that sort of money. ESPECIALLY in places like the suburbs of LA or the Bay Area, parts of Boston, etc. Those property values eventually will rise again. Don't bother with Podunk nowhere exurbs in Missouri. We're not likely to see a return to full value for those properties until inflation causes literally every commodity and property to rise in value.
As for applying for a loan... I'm not sure you're going to get a loan. Banks are loathe to lend to each OTHER, let alone you. If your credit is top notch and your income is considerable, go for it, but like I said, wait a few months.
This is a fantastic time to invest in oil, though! That will go straight back up as soon as this credit crisis begins to resolve. Far quicker than real estate.
RECOMMENDED READING: I would stay away from most conventional investment magazines and websites for the time being. They helped get us into this mess. Stick with the economist, the NY Times, the WSJ, more clinical sources. Check out the "Naked Capitalism" blog and follow the links around.