Jim Green’s father-in-law, who lives in California, would like Jim to move out from Tempe to California so he could see his grandchildren more often. Jim Green argues that housing is too expensive in California. Spouse’s pop responds: Of course you pay more, but then housing prices in California appreciate faster, so in the long run it is a better investment.

Question: Does Jim Green’s father-in-law think the markets for housing in Tempe and California are “efficient?” Explain.

Is the market efficient?