“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.”
Regardless of whether the market is efficient or not, I think there is a fundamental flaw in here, and that is the assumption that more efficient means lower prices. A more efficient market would simply respond more immediately to supply and demand. Prices may increase or decrease when this happens.
That said, I think the RE market is signficiantly more efficient than 15 years ago, but still has a long way to go IMO to be as efficient as other capital markets. There are plenty of other factors (including emotional ones) that come into play and probably always will be.
