I am constantly amazed by the prices of used bikes around here. To me they are usually much much higher than I expected. I helped someone look at and buy a used bike a while back, and couldnt believe how much was being asked, and yes, the buyer paid the price, depsite me saying that it was too high. The seller knew it, and stuck to his price, I imagine he buys and sells bikes often, so knows the market, especially among students looking for a bike around the time schools start up.
the vast majority of used bike ads I see are just stupidly overpriced, for the quality of the bike, the condition, you name it. But its a free market, the demand sets the price.
I did that with a friend, he bought a low end 15+ year old hybrid with lowest end shimano components (I believe full on tourney but maybe acera) and rotted tires and spent $200 on it after I repeatedly told him not too. People just don't listen to those who have experience anymore. I ran into it at the bike shop where I worked all the time. "I am not sure, let me call my friend who rides a bike" because there friend who rides a bike every so often knows more than the guy who lives and breathes bicycles for a living and for fun. Or I would get the people who thought they could ride a bike that was way to big for them and I would always tell them it just isn't going to work and they would insist to try it making me do extra work and then have them realize I was right and they are complete and utter morons who should be wiped from the face of the Earth...sorry still a little bitter ; )