How was that listing price arrived at?

At one end of the spectrum, it might be because, the seller needs almost that much to buy the new house they want. It is possible that a listing price arrived at this way might be reasonable in view of actual market value, and... and there is a chance that a listing price arrived at in this way might actually be below market value. However, there's a better chance that a listing price established this way is high.

At the other end of the spectrum it might be because the real estate agent did a good job of assessing the property and the current market conditions ...and the seller accepted that agent's advice.

In between, there are a lot of possibilities. Sometimes the seller has taken a job outside the area and is anxious to move. Sometimes the listing agent has 'bid' up the listing price to secure the listing. Sometimes the seller is adamant about a high price despite the market evidence and experience of the listing agent. And sometimes the property might be worth that to someone who has a special requirement that is not typical in the marketplace.

In the end, the 'why' or 'how' that listing price was arrived at, is not as important as the value that property has to YOU the BUYER.