It takes time for attitudes to change. We're roughly 18 months...

It takes time for attitudes to change. We're roughly 18 months into this new housing market with flat-to falling prices, but vendor perception remains in the pre-2010 boom mindset.
And fair enough too, there isn't enough hard evidence out there yet for the regular Joe to think otherwise (where 'evidence' in this context is screaming buffoons on the tellie or front page of the Herald Sun).

But the hard evidence continues to accumulate. Eg; the place I rent now. Owner has decided to sell, wants $635k plus, pitched it in the $580k-$620k range, and heard nothing but crickets when the first - and last - vendor bid of $580k was placed on the weekend. And wouldn't look at a late offer of $605k. Why not? Well, the place is overcapitalised. (Remember that expression? I haven't heard it uttered for nearly 20 years)