Usually a mistake — not because there is anything wrong with the house, but because the street puts a ceiling on it that the house cannot climb over.
Buyers shopping at that price look at better streets. Buyers shopping that street have a budget shaped by what the street usually sells for. The home falls between the two groups, which is the definition of a narrow buyer pool — and a narrow pool is slow, and slow gets negotiated.
There is a second mechanism people forget. An appraiser reaches for the nearest comparable sales, and the nearest comparable sales are the neighbours. When a purchase price runs well past what the surrounding sales support, the financing conversation becomes real rather than theoretical, and the buyer who wanted the house is not always the buyer who can complete on it.
Over-improving is the one resale mistake people make with their own money, deliberately, one renovation at a time, and it does not announce itself until they list.
The version that reliably disappoints is the heavily renovated home in a uniform suburban community where every house is a similar age and finish. There is no spread for the improvement to sit in.
Look at the highest numbers the street and the immediate blocks have actually produced for the same type of home, not the asking prices — and look back far enough to catch a full cycle rather than the last quarter. Then separate what the lot is worth from what the house is worth, and ask which half your money is going into.
Sold prices and property history need a free registered account — that is an Alberta MLS® data licensing rule, not a paywall. See also the inverse of this question, buying the cheapest house on the best street, and which renovations are worth doing.