"Why aren't buyers buying real estate right now?"

Someone walked into our office yesterday and asked us this question. It's a fair question, here was my response (basically word for word):

"Buyers aren't buying for three main reasons:

1) You can't have the world's economy tank without having an overall repricing of pretty much every asset in the world. Almost everyone, across the board, had a reduction of their wealth

2) Lenders have severely stepped up their requirments for pre-approval. Good for them, their wayward approach to lending is what's fueled the nation-wide forclosure mess. But many lenders are now requiring 30% down. For someone who's taken a 25% hit on what they were worth last August, having to put down 30% (instead of 10-20%) to purchase is not exactly driving buyers to the offer table.

3) Most buyers think we have another drop in the market and seem content on waiting for that to happen before they buy again. This world wide consumer pessimism is contributing to the resistence people have towards buying ANYTHING right now....."

Oh, and prices are too high, but that's a topic for another time :)