Priced increased greatly in 2003, 2004, 2005 and sluightly in 2006, then sayed the same or declined slightly in 2007 and decreased in 2008, 9,10 . So there was more time for increase in value then there was decrease in value.
It is called appreciation, housing prices have increased since 2003. Also, just because someone is asking a particular price for a house, does not mean they will always get their price. There are many houses currently on the market or have not sold due to improper price and or condition.
I think that given a typical economy, this place would have been priced properly. With that being said and not knowing what improvements that may or may not have been made, I think this property may only be $20K or so off the mark.