The End of the Buyer's Market!!!!

It’s not my intent to add fuel to the negative fire, but I am beginning to see the end of the Buyer’s Market. Unfortunately, I think it’s the beginning of a “Lender’s Market.” What do I mean by this?

Seller’s Market = Sellers dictate price and terms (Woe to Buyer)

Buyer’s Market = Buyers dictate price and terms (Woe to Seller)

Lender’s Market = Lenders dictate terms and make it impossible to get a loan (Woe to Everyone)

It’s hard to argue that lenders are returning to the practices that did not fail them in the past. A lender’s bread-and-butter is a 30-year, fixed-rate, conventionally amortizing loan based on 80% of appraised value taking no more than 28% of a borrower’s gross income (36% maximum total debt.) This is what is coming and it will be a catastrophe for sales volumes and home prices.
Why would banks continue to loan 90% of value when there is a likelihood of a greater than 10% decline and banks know high loan-to-value ratios result in high default rates? They are doing it now because they have to in order to make any loans at all. But only the very high FICO scores will qualify, and they are betting these people will not default do to moral reasons or the desire to keep that high FICO score. If they try to extend these loans to lower FICO score individuals or subprime borrowers, they won’t stay in business long. Large downpayments are coming back, and government assisted financing will become widely used by first-time homebuyers to overcome the high equity requirements. What other way is there to move forward?