I think it is a combination of two things: Many sold their gear in anticipation of the expansion and just don't log in. Many others just don't log in because extremely bored, as currently there really isn't much to do. The result is: there aren't many to post items and even less people to buy them.

It really is the upcoming expansion. I have seen this in other games as well. On the day the expansion hits all prices will skyrocket for a couple of days, unless it takes sooo long to release that people just get into other games and have no time for this one :-)