You just can't win!  The experience I'm having, on the ground, is this:

• If a house is priced "appropriately", given normal pricing methods of the past few years (see below), it may generate traffic, but it won't generate offers.
• If a house is priced lower than the above referenced "appropriate price" it will generate traffic, and offers, but buyers will want to negotiate lower than sellers are able to (or want to) because of their already aggressive list price.

Over the past five years, normal pricing practices would be (generally speaking) to look at what has sold recently, and what is currently available. 

For our example, let's assume that the three most recent comparable sales are $220k, $225k and $230k.  Certainly, this would indicate that the value is quite likely $225k based on what has recently sold. 

Then, if we look at what's available now, we might find something priced at $225k, $235k and $240k.

Conventional wisdom would thus suggest that we price the house at either $229,900 ($230k) or $234,900 ($235k).  This would allow for some negotiating room down to the perceived value of $225,000, and yet would still be appealing compared to other properties that are currently available.

What I'm seeing these days is that if you're priced above the perceived value, you often will get traffic, but not offers.  Thus, if the home is priced at $230k or $235k buyers will come to look at the home, but they won't make an offer because they perceive the value to be $225k, expect to thus pay $215k to $220k, and then don't make an offer because it would require $10k to $20k of negotiating.

If we accept all of that to be (generally) true, the next logical step is to list the property at either $224,900 ($225k), or perhaps even $219,900 ($220k) depending on how motivated you are to move the property. 

But the problem here is that you'll then likely have buyers who want to pay $210k or $215k --- WAY below where you perceive the value to exist.  Just to bounce back to that "value" (because some people would question it) --- if your three neighbors just sold for $220k, $225k and $230k, would you really reasonably think you'd have to sell at $210k or $215k to make the sale??

What is a seller to do? 

It is a tough call in any regard --- my counsel in a real live scenario differs from client to client and from property to property depending on the urgency of a homeowner's situation, the particular comparable competing properties, etc.  There are ways to successfully navigate this market as a home seller, but they require careful analysis, and patience.