Hours of searching did not find Booher, convicted in 1999 of an Indianapolis murder. Also still at large is 45-year-old Lance Battreal, a convicted rapist from Rockport, Ind.
Authorities believe the three inmates escaped Sunday from the maximum-security prison in Michigan City, Ind., through underground tunnels and pipe chases.
Police were heavily patrolling the Grand Beach area but have suspended the massive search that was going on.
Downtown New Buffalo is a vacation spot. But on Monday night, people were on edge.
"There are so many police around here. The state, county and the locals," New Buffalo resident Dean Carlson said.
"I got searched leaving Grand Beach at 6 o'clock. She got searched at 7 o'clock. She came back at noon, and we had probably 35 police and sheriff's deputies," Grand Beach resident Bob Barnes said.
Joel Blakemore closed down the Grand Beach golf course and locked the doors.
"Until they are apprehended, the sheriff told me I'm not supposed to let anybody out on the course," Blakemore said.
The local police, FBI, U.S. Marshals and Indiana police are all involved in the manhunt. They've been searching by foot, by air and by boat.
Every vehicle going in and out of Grand Beach was being searched Monday, as police continued a door-to-door search of homes in the exclusive lakefront community. They were trying to find Booher, who got away Monday morning after Smith was arrested about a quarter-mile away from the vacation home of the mayor. The home is about eight miles from the prison.
"Several homes are vacant. We're not sure which ones, that's why we're going to door-door. As you go through the area, there's a lot of wooded areas, so it does make it much more difficult," undersheriff for Berrien County Chuck Heit said.
The search is being conducted on a grid pattern. Jennifer Connelly had her home searched Monday afternoon.
"[Police] came in with guns and things, but couldn't have been sweeter or nicer. I feel pretty safe because they're all over the place. I'm staying at my friend's house tonight," Connelly said.
"They had three choppers in the air, canine units and, I believe, a few boats out on the water searching it, combing it continually. It was pretty exciting and intense seeing everything come and go," witness Don Shifferl said.
"There are metal tops welded onto manhole covers, so they can't be removed, and these are some of the measures they were able to defeat," John Schraeder, of the department of corrections, said.
Authorities were first alerted that two of the three were in the Grand Beach area when they were spotted walking along U.S. 12 early Monday morning. Later, around 5:30 a.m., they were again seen--this time a block from the mayor's home, having an argument with one of the neighbors. A Chicago police officer that is a security guard for Mayor Daley held Smith at gunpoint until authorities arrived.
"I immediately had a feeling something was wrong. I already had my guard up. It was 5 o'clock in the morning, and these guys looked like they had been laying in wait somewhere," Chicago Police Officer Michael Smith said in a statement.
As for the mayor, he and his family were asleep in the home while all of this was going on and were never in any danger.
"He saw two individuals walking at 5:30 in the morning, adjacent to the driveway, which was unusual," Daley said.
Booher was last seen wearing a white t-shirt, sweat pants and a pair of blue shorts over the sweat pants. Battreal, has not been sighted in the area, but police cannot rule out he might be there.
Reward established for prison escapees information
An anonymous tip line has been established for anyone with information regarding the two felons who escaped from the Indiana State Prison Sunday morning.
Individuals can call toll free to 1-800-78CRIME (1-800-782-7463) or can go online to www.wetip.com and click on "Submit a tip" near the top of the page.
If the information leads to their capture, the individual could receive up to $5,000. Individuals reporting information will remain anonymous.
The Associated Press contributed to this report.