If you want the property, I recommend that you make the offer.
In many cases these days, the sellers may owe much more than what the property is worth. So they initially put the property on the market for what is owed. Or.....they feel that they want to walk away with something so they over price in hopes they will find a buyer who will not hire a professional who will do the research and homework it takes to truly know the value of a home. I have had many potential sellers go to websites to get prices for their homes and insist thats what is worth. But when doing the reasearch they were 100k off. A Realtor may decide to still take this listing in hopes of having the seller get realistic over time or purely to get some marketing value out of it. Its sad........but true.
My suggestion to you would be, if you are truly interested in any home. Get your own Realtor (not the listing agent, somone who is purely on your side) and have them obtain all the information to come up with a price that is fair. They can present this information to the seller when submitting the offer so the seller knows why they have come in a that price.
Hope this helps! Good Luck to you!
But...big "but" here...DO NOT WORRY ABOUT OFFENDING THE SELLER!! It's your purchase. It's your decision. Some sellers will be offended if you offer a penny less than the asking price. Others will be grateful at an offer 30% below asking price.
Figure out what the house is truly worth today, in today's market (use a Realtor for the comps). Then determine what you can comfortable afford to pay. Your offer should be no greater than the smaller of those two numbers. In fact, it probably should be somewhat under. After all, real estate values may continue to decline. And you want to leave some cushion in your budget as well.
Was the seller worried about offending you when he/she priced the house as he/she did?