In this area there in an abundance of foreclosed properties, and while it is wise for property owners to price to sell they don't want to loose their shirts doing so. Also I agree that many property owners have emotional ties to their homes that need to gently be severed in a buyers market. I hope this helps.
Another reason - at least in my market area, and I'm sure it applies to other market areas - the seller relies on the information and sales pitch from the seller's agent looking for a signed listing contract and increased commissions. Which preys on the seller's emotional ties to the property. Not all, but many agents try to falsely drive up property values with inflated sale prices, much as what was done during the boom years - 2004, 2005, and 2006.
An intellegent seller would obtain a pre-listing appraisal to ascertain the market conditions, marketability of the property, and what may be needed to achieve the most probable selling price, which the market dictates, prior to putting the property on the open market.
An intellegent buyer would do the same by acquiring a pre-purchase appraisal, which could potentially save them hundreds and/or thousands on the deal, before making an offer, and obtain unseen or non-disclosed aspects/conditons in addition to the actual market conditions and reaction to the type of property and related elements.