Is Overpricing a Property a Service or a Betrayal?

This afternoon I was talking to one of my associates and we were discussing the property listings that are coming on the market this Spring.  It seems that everyone who wants to sell is convinced that a new boom is happening and they "want" to price far above the supporting comps.  The sellers are listening to the news stations touting their agenda, that everything is coming up roses, and they are convincing themselves that everything they hear is true.  Well, I'm here to say that in some areas the reports may be true but not everywhere.  In my locality unemployment is still in the high teens and the buyers coming in to the market are very well informed and are not willing to pay inflated prices.  Today's buyers are pretty savvy and they are not easily fooled.  

We feel that the agents taking these listings with nothing to support their pricing are actually violating the trust their clients are placing in them.  A slight increase over last year would be acceptable and probably supportable on appraisal, but pricing 20 even 30% higher is a betrayal of the trust the clients have placed in them and is not a service.  The properties won't appraise, so what is the point of doing it?  

I grant you there is far less inventory this year, but does this justify overpricing just to get a sign in a yard and to say you have a listing?  The sellers are bound to be disappointed when the appraisal comes in and they either have to drop their price or watch their buyers walk away.  In the end the sellers aren't going to be happy with that agent and it is unlikely that their properties will sell either.  

I thought it was important to raise this issue as it is very prevalent this year and it is hurting our ability to sell properties.  If the buyer offers a fair price the sellers feel insulted because some agent promised them the moon and couldn't deliver.  In my experience it is better to price fairly than to give sellers unrealistic expectations.