Where are all the buyers?

That is the number one question in the real estate market today. I don't believe that there is any simple answer to the question, but is a combination of several factors.
The new home builders have an inventory of homes that buyers have pulled out on. Since the builders have capital invested in these houses they are offering unprecedented discounts to move them. This, of course, cuts into the resale market.
Many people that would like to move are finding it difficult to sell their present home so they are unable to buy. This creates a vicious cycle.
Also, the media doesn't do the real estate market any favors with the scary articles that they print. Who wants to buy a home if the prices are going to keep falling by 10-20%. The truth is that the Phoenix market is flat but not falling in most areas.
Just keep in mind that real estate is cyclical and just like the boom of 2005 this market will not last.