What are Buyers Thinking?

I've been hosting a lot of Open Houses lately. It's a great way to really hear what the buying public are saying and thinking. Here's some insights that I have gleaned over the past few months. Just be aware that this is not a scientific study!
1) Buyers are mixed on just how much further home prices will fall. Most believe that prices have some more to drop, maybe as much as 10%. However, some believe we will see another 25% decline in prices.
2) Buyers are concerned about interest rates long term. Most believe that the government will eventually have to deal with inflation due to all the money being pumped into the system.
3) Interest rates and down-payment requirements at the upper price points are keeping buyers on the sidelines. Here's an example: At purchase prices above $1M, buyers need 30% minimum downpayment. At a purchase price above $1,025,000 and even with 30% down payment, a buyer must get a Super Jumbo loan with a rate premium of 1.25% above the Agency Jumbo loans for loan amounts under $725,000. And that's after paying one point in pre-paid interest! Yet even the rates on Super Jumbo loans are at historic lows! It's buyer perspectives that have changed!
4) Buyers are looking for bargains. And they are not willing to pay for exta land or space that they do not need, even if it has value. If all they need is 2 acres, they won't value 5 or 10 acres at anything near reasonable market value.
5) Buyers are caught between wanting the lowest price on their next home and having to sell their present home in a declining market. Which one will decline fastest? Also a good percentage of buyers are looking to minimize their property taxes going forward by using the Proposition 60 advantage. This means that they can buy the next home for no more than 5% above what they sold their present home (within one year). Both of these trends are forcing buyers to constantly re-evaluate purchase price comfort ranges from month to month.
6) Specialized buyers (Ex. equestrian and vineyard, etc) are having to stay put because they cannot find enough interest in their present property to consider a larger, newer or different one. Most don't have enough equity to qualify for the loan on a larger property.
7) Raw land prices are plummeting yet loan requirements are tight forcing sellers to offer secondary financing. Nonetheless, most buyers believe they can find what they are looking for in an existing home without resorting to new construction, and at a savings to boot.

In spite of (or maybe because of) all this, buyer traffic at Open Homes is up. There is pent up demand out there that eventually will be set free. For me it's fun and eductaional to pump the flesh meeting and greeting potential buyers at Open Homes. There's no better way to catch the heartbeat of the market.