A nice debate.
Eric Lascelles of RBC Global Asset Management argues now is the best time to buy your first house, because interest rate is at historical low, house price has declined 34% from the 2006 peak, and owning a house has become relatively more attractive to renting in recent years.
Gary Shilling is on the other side. He predicts further fall of house price by as much as 20%, due to excessive inventory. If taking into account of the hidden inventory (people chose to hold up because the current offer is too low), and future foreclosure, he argues, the situation is even worse. He also cited Bob Shiller's research that showed in the past, when housing bubble burst, it tended to overshoot on the downside. We haven't seen that yet.
My personal view is that it's a good time to buy your first house if you really love the location, and you have no plan to move to another place, say, in the next 5 years. I would still stay away from using house as an investment.