The price of greed is the difference between what you would have gotten with a correctly priced house from the outset, and what you now have to settle for because you over-played your hand. 

A real estate market like this always provides plenty of examples:  sellers who missed the peak but still want to price their house at it.  To be fair, there is some logic to how it happens:  in a slow market there is, by definition, a paucity of sales.  Given that, there is a natural tendency to use other listings as "comps".  Those listings, again by definition, have not sold.  The seller and agent could have put any price they want on them -- doesn't make it valid.  In fact, the pressure on agents to list homes at high prices can be intense from a seller who remembers what his neighbor got in 2007.  Often the agent, not wanting an over-priced listing and wanting to give the seller the truth, is faced with losing the listing to another agent who badly needs a one, and doesn't care if it's overpriced (and therefore doesn't sell) because they can advertise and hold it open and get new customers. 

But back to pricing off other listings:  the listings that can legitimately be used as "comps" are those that are competitively priced and have been on the market for 30+ days.  This sets a ceiling on the market and you know, after allowing for differences between the comps and the subject, that you can't be higher than they are.

The underlying point is this:  as a general rule, the seller who prices his house over the market ends up getting less for it than if it had been priced correctly from the get go.  When a house goes on the market for the first time in, say, a few years, none of the buyers then looking will have seen it.  Even in a slower market, there is a big backlog of potential buyers built up, they will have seen everything else for sale that meets their criteria, will have a good idea of what they want and what they should pay for it, and will be descending upon any new homes that come up.  The odds are that one of them is the best buyer for your house, because a) the listing is new and no one knows how fast it will sell, so there will be a strong urge for those who like it to step up to the plate; b) the listing is not old and therefore not appealing to the bottom-feeders; c) this initial surge includes a lot of buyers, more than one of whom may be viewing the house simultaneously, creating a sense of urgency.

I am not discounting the difficulty of determining the proper price in a slow market, as outlined above; but careful analysis and consideration must be given to the recent sales, if there are any that are relevant, and to those in escrow and those unsold but priced well.  A Realtor active in the area can be invaluable here.  Do not put any weight on values indicated by websites like Zillow or Redfin; they are in business strictly to make money by selling advertising and have never seen your house, your neighborhood, or probably anything outside their cubicle.

The downside of over-pricing is probably obvious to you.  If not, here it is:  by the time you become convinced that your price is too high, at least a month (maybe longer) will have gone by, and that big bunch of buyers will have come, gone, and moved on to other homes.  As anyone knows who has had their home for sale for longer than 45 days, the activity slopes off precipitously at that point, because that is about how long it takes for that initial surge to work its way thru.  At that point, the once-flood of buyers becomes a trickle -- these are people just starting to look, or might possibly have been on a 30 day cruise.  Whatever, the fact is that your listing now shows 45+ days on market, implying to the buyer that no one else wanted it prior to that, and that he can now "negotiate" the price.

You're only new once, so don't blow it with an unrealistic asking price.