I've always been of the opinion that if you're going to live somewhere long-term, buy something rather than rent. But that doesn't translate into "buy anything" ; you have to find the right deal.
If you view your home as an investment that needs to appreciate, you may have to wait 10 years+ for that to happen around here. Maybe renting is better for you if that's your mindset...then throw your money into a growth vehicle (wherever those are!).
However, if it's going to be your home, it's going to be your home for a long time, and you're looking not to get burned by prices collapsing....well, how much lower can home prices get? Between value and mortgage rates...someday we'll be looking back at this time and saying "if I only bought something back then" (it'll happen).
Look at Ace Face's comment--the house he sold for $106K just sold for $35K. Bad news for that owner after Ace, but hell, what if you find a little (or big) gem at a great price in a nice area and just live in the thing until the market comes up again? Between a decent interest rate and people begging (almost literally) for you to buy their house and (partially) get 'em the hell out of the mess they're in, if you have the assets...I'd buy. Hell, a $100,000 house at 4.0% is less than a $500 payment per month.
Wanna go smaller? Well, the Blade is always using a "$60,000 house" to reference how much all these levies are going to cost us. Same math: $60,000 house at 4.0% is a (raw--no taxes) $286.44 payment. Wow.
Anyhow, I like buying, but that's me. But only if you're in the area for the long term. And I wouldn't buy in the city of Toledo.