There's another important reason houses can sit on the market un-sold and without meaningful reductions. Its common too, in my area.
The seller cannot actually afford to sell. Not at a price the current market dictates the property to be worth. So it sits for weeks/months and even years - as they hope to get lucky and attract a greater fool.
This is very common here in my area especially with some property that has changed hands in the last 5 or 6 years. The reasons are obviously individual, as every seller has different circumstances, but the main reason is obvious if you think about it. They bought at bubble prices on cheap borrowing rates, prior to a nasty round of inflation and cost of living increases, prior to a horrendous round of inflation that didnt really in reality include home values permanently. Now that prices are no longer increasing (even settling back in some areas) and borrowing rates have changed considerably. They are well and truly stuck. They either find another mug to pay "x" or they are forced to sit tight. In effect saying that they don't "need" to sell maybe true - but often underneath it is the reality that they can't afford to sell unless a buyer overpay's.
Its important to try and identify where this might be the case when looking at homes. Don't get hung up on "I want that property - but the price is higher than it's should be". Because in reality a good number of those properties just won't be sold. Make your offer based upon your circumstances and your own perception of its value, disregarding its headline price. If that offer is declined and the seller doesn't attempt to negotiate with you - just move on. Dont put yourself in the same position that they are in by considering overpaying. Its a frustratingly slow process - but markets always have to adjust to affordability eventually.