I would say if you can afford the house, then do it. Yes, the housing market is depressed right now. Honestly, who knows exactly when the market will bottom out. It could be right now.

Just as investing in stocks goes, unless you know more than anyone else about when things will turn around or bottom, don't try to perfectly time the market.

What's better buying a home while it's still cheap, or buying when you've waited too long and prices have already gone up?

Real estate is not cheap, and is actually severely overpriced. Calling real estate cheap when in many US locations prices now are still 60-70% over the prices in 2000, people have more debt that they can afford to carry, and economy is in recession is just plain wrong.

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Never spend your money before you have it. -- Thomas Jefferson

Yep I'd certainly be considering the investment were I in your shoes. If you think the house is cheap, or more to the point if you can afford it, then get it!

I agree...I would think if you can afford it and the price is right...Go for it.

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New graduate with an emphasis in debt counseling.

Take a look at what he is asking you to pay for the property, then take a look at what your income is, and then what percentage of your monthly income it will cost for you to make a monthly mortgage payment. Make sure its less than forty percent.

Then I would never invest in a property unless it could generate me a 10% profit if I had to rent it out (thats after you pay the mortgage and misc expenses). So if you notice rent for a similar property in your area is 10% or more than your monthly mortgage payments would be than I would say buy. If not, try to negotiate a deal with him. But this is a iffy situation, since he is a friend of yours. Good luck!