Efficient Real Estate Markets: Paradox or Paradigm?†

Abstract

This paper examines the question of whether an efficient markets paradigm should be adopted for the modelling and testing of real estate markets. It considers the perceived imperfections commonly suggested for these markets and reviews the existing weak form and semistrong form tests of real estate efficiency. Finally, it examines some of the likely implications for real estate research and practice resulting from the acceptance of such a paradigm.