Buyers and Sellers worst enemy...themselves

One challenge facing prospective homebuyers is the difficulty of finding a house in a good neighborhood in good condition.  Prices continue to decline, but so does the number of homes for sale.
 New research gives us one reason why: Buyers may think it's a good time to buy, but sellers don't think it's a good time to sell.  A recent study I was just reading about found that nearly 80% of Americans think it's a good time to buy, but only 7.6% think it's a good time to sell.  The feelings of homebuyers are the same as in previous recessions, but the sentiments of sellers are different this time.
      Nearly two-thirds of those who expressed negative selling sentiment listed "difficulty of finding a buyer" as the reason. What this mean is the difficulty of finding a buyer at the price they want.

• Buyers' and sellers' worst enemy? Themselves
   
  Real-estate agents have to educate sellers on what price their home is really likely to fetch now. If sellers really want to sell, they adjust their expectations to the changed realities.

• See what's for sale in your neighborhood

If the sellers won't face reality, the agents sometimes decline the listing rather than waste time marketing a home that won't sell at the desired price.

Some agents are writing price-reduction clauses into contracts with sellers, which authorize automatic price reductions if no action occurs in the first few weeks.

Are sellers refusing to face reality? Or are they smart to keep their homes off the market now?