Several readers want to know what potential buyers think about the market today. "I’d like to see a discussion about what buyers 'on the fence' are really thinking right now. What exactly will it take to get them to buy a home?"

"For example, I’ve noticed that several people who post here are eager to buy a home but believe that prices are too high to justify a real estate purchase right now. Presumably, they would purchase a house if prices dropped sufficiently."

"Just a few months ago I would have counted myself among that group. Falling prices would have been enough to change me from a Looker into a Buyer. Today, that’s no longer true. I’ve simply learned too much about the lax lending standards and shady dealings that drove the current run-up in housing prices. I would need to see both a return to normal prices as well as a more conservative lending environment in order to feel comfortable purchasing a home. Does anyone else feel the same way?"

A reply, "I think you are on target. I own (since 1973), but I have children that would like to buy houses and I advise agin it. I am paricularly stunned by DTI ratios needed to purchase at current prices. For many reasons, I expect housing prices to drop by 50% or more over many, many years. This drop can occur by a real drop in price or by inflation allowing wages to justify current pricing levels. Either way it occurs, there is no housing market until house price correction event happens. I have no interest in catching a falling knife."

A reader from New York City, "In my area, I would start thinking about buying if the prices dropped half the distance they rose between 2001 and today. Obviously if they were tumbling down I would wait, but I think we are going to see a long slow drop."

Another said, "Here’s the problem. We don’t know if there ARE many fencesitter fish, really. We don’t know true inventory, because all casual fisherman haven’t pulled in their lines and taken their houses off the market yet. In other words, the sediment has to settle."

"In our case, we’ve decided we really LIKE renting. So we’ve created a value = $212.50 per hour on my husband’s and my time saved by not doing ANY of the HGTV nonsense. This equals approx. $1,000 a month in additional savings we would have to see on a home purchase over renting."

"Therefore, for us to buy, we would have to be able to purchase the house (same we currently rent) for MUCH less than our rent. this is approximately 1999 pricing. This considers net tax gain, investment loss on our 20% downpayment over 30 years, insurance increase, maintenance, etc."

"We were active bidders, never won a bid, and ended up in a nice rental instead. So current rental happiness plays a part here."

And another, "If my house had sold, we’d definitely rent. The biggest message I’ve gotten from this blog is that Cash is King and keeping liquid is strength as we go forward into this thing. I’d also feel I was still buying at the top if I purchased within 1 year of the peak."

"A quote from the Studs Terkel book 'Hard Times' about people’s memories of The Depression gave me the chills the other night. During a panic your home suddenly becomes worthless because nobody wants it."