Where have all the Buyers gone?

I remember growing up in the '60s, listening to The Kingston Trio singing, "Where have all the flowers gone? Young girls picked them, every one. When will they ever learn? When will they ev-er learn?
Now I wander around my world singing, "Where have all the Buyers gone? The media scared them, every one. When will they ever learn? When will they ev-er learn?"
This real estate market is amazing. Here in Arizona's Sedona Verde Valley area, we have hundreds and hundreds of homes for sale, most of them at incredible prices. Interest rates are at a 40-year low, sellers are ridiculously negotiable, and yet very few buyers are coming out of the woodwork to take advantage of the situation. Amazing!
Why? I understand that the media has done a hatchet job - bad news sells better than good news. But why did people believe the bilge that got spewed? Why are they still believing it? Why have we allowed the short-sighted politics that caused this in the first place?
I know that 2 years down the road everybody is going to be kicking themselves for not grabbing a house now when the deals are so favorable to the buyers.
If you are somebody that thinks that they might want buy a house someday, please let me know what I'm missing. I promise that I won't jump on you wanting to strong-arm you into buying - I don't roll like that, anyway. I'm just confused and need enlightenment.