The seal on a road is like paint on your house - it keeps water out of the structure underneath. Like paint, the seal breaks down over time and starts to let water in. When the surface of a street starts to break down it is time to reseal.
The ideal time to reseal is just before the seal fails, so your road may still look to be in good condition. Streets are resurfaced with a chip seal except where the Council engineer has reason to believe a different surface type is required.