[quote=sdrealtor]There is a fairly widely held hypothesis that because we can find so much more information online about real estate that the market is more efficient and hence prices should be relatively lower now.[/quote]

I think this is a faulty hypothesis. This hypothesis assumes that benefits from a more efficient market will go to the buyer. I don’t see justification for that assumption.

Also consider, just what do you mean by more efficient? You still have a seller with a product, and a buyer with money, and a pair of realtors in the middle. Unless you take out the realtors, I’m not sure where there is more efficiency in the transaction. It’s true that you can find places or search the mls easier, but that is not the same thing as a more cost efficient transaction.

[quote=sdrealtor]AM I nuts to think that the Internet may have permanently increased fundamental prices levels. It has given sellers an advantage that did not exist a decade ago. I guess what I am asking is – “Is it different now?”[/quote]

Yes you are nuts. The internet has made information more readily available to all parties, both buyers and sellers, and so has given no advantage to any one group.

Is it different now? Not due to the internet. The strong prices you are seeing now are not the result of the internet but of government support. As long as the government is doing so much to increase demand and decrease supply, then yes it’s different.