I was quite surprised by this. I played some guitar in my teens and a good guitar was quite an investment (mid-late nineties). My dad is a bit of a guitar collector and it is surprising what guitars he finds for ~300 Euro, quite respectable quality.
(Maybe it also has to do something with the lack of demand now, guitar music was still very popular in the 90ies.)
I think the big changes that caused prices to drop was online shopping and the move to East Asian manufacturing outside of Japan. There are "store-brands" like Harley Benton that target below $150 for some instruments, the Internet is awash with positive reviews.
I'm not sure if demand has changed. Guitar music is less popular but it's much easier to learn right now.
