I am not sure that real estate market pricing efficiency is the the best analog to support your point that US municipal bonds are misunderstood.
Real estate possessed unique fundamental underpinnings to its own demise (mostly vast liquid DEBT and investor support holding up prices) that when it disappeared eroded 90% of its value in 2008.
Yes, real estate market has firmed up a bit, but there are still enormous amounts of real estate that will never return to its 2006 peak value, mostly due to oversupply.
Municipalities, despite obvious risk factors like underfunded pensions and declining tax revenue, still function despite negative cash flow because of access to debt thru the bond markets. Once that appetite from wealthy individuals seeking tax-advantage income gets squeezed for safety concerns, this illiquid market will seize up and choose its own set of zombies to create.