Is it a good time to buy a home or not?

It depends on the specifics. If you're planning to live in a given area and aren't going to move any time soon then you should buy if your monthly payments are going to be less than your monthly rent.

If you're planning to move and are worried about the equity in your home, then you should compare the pre-recession inflation adjusted price of the house to it's current price, and objectively examine market conditions. If you're in a large metropolitan area, then anything that's near 100 on the Case-Shiller index probably won't depreciate much if at all. On the other hand, if the area you're looking at is way above 100 in the C-S index, then there's a significant chance the property will depreciate because in the long run most home values tend to 100 on the index.

That said, the index isn't good for most people because it doesn't have enough resolution. What's better is looking at the inflation adjusted average sales price for a give zip code (or better yet a group of comparable homes in a given zip code), as of the year 2000, before the real estate bubble started to inflate, and compare that to the asking price in order to make an offer. Also look at other influences on the market, like unemployment and the number of distressed properties, both of which make it tougher for the equity in your home to recover or even hold it's ground.

There are some novel ideas out there. San Bernardino county wants to help facilitate market corrections using imminent domain. The basic idea is that the homes will be purchased by the county at their current market value through imminent domain, and the existing owners will get to buy those houses from the county (financed by some lender) at their current market value, which will drastically lower their monthly payments. This is good for the county since it reduces the blight of vacant properties as well as the crime that goes with it, and it's good for the homeowners who can now get a much lower loan payment than even a modification can provide, and naturally get to keep their home. On top of that the investors who provide the capital will make money on the interest too.

On the other hand, it's bad for banks because they have to write off the losses at the time the county seizes the property. Normally they could stall foreclosing on a home so they could write off losses at a slower rate. It's also bad for investors buying homes to try and turn a profit because it will increase home values in blighted areas by limiting the number of foreclosures, which reduces their profit margins on the properties they are flipping or renting.