Earlier this month, Jackie Han, attending the Berkshire Hathaway annual shareholder meeting, posed a question to Warren Buffett, the company’s chairman and CEO. Han commented, “As someone from a Chinese family, we’ve always had a fondness for real estate.”
This sentiment resonates with many Americans. In a yearly Gallup poll, when asked about their preferred long-term investment, real estate has topped the list for the past 12 years. In 2023, 37% of respondents selected real estate, while only 16% opted for stocks.
Curious about Buffett’s perspective, Han inquired, “Why do you continue to invest in stocks rather than more properties?”
During his response to the audience in Omaha, Buffett mentioned that his long-time partner, Charlie Munger, enjoys real estate investments, but primarily as a hobby. Buffett suggested that if Munger had to choose between stocks and real estate at a young age, he would likely have favored stocks due to the greater opportunities available in the stock market compared to real estate.
Buffett’s views are supported by the stock market’s historical performance. Since 1988, the S&P CoreLogic Case-Shiller U.S. National Home Price Index shows a 374% increase in residential real estate values. In contrast, the S&P 500, representing the broad stock market, has soared by 2,218%, with reinvested dividends pushing the total return to 5,006%.
Despite the unpredictability of future performance, Buffett remains confident about the long-term potential of U.S. businesses. At the 2025 Berkshire meeting, he reiterated his positive outlook on the stock market, attributing much of his success to having been born in America, remarking, “If I were to be born today, I would negotiate to be born in the United States.”
The Complexities of Real Estate Investment
Berkshire’s extensive resources allow it to invest in various real estate ventures, not just residential properties. However, Buffett expressed that the process of purchasing real estate can be cumbersome. He noted, “Trading on the New York Stock Exchange allows billions in business to be conducted anonymously and swiftly, unlike real estate negotiations, which can be lengthy and require significant time input.”
This complexity is significant for any investor aiming to build wealth. Whether engaging in large-scale land deals or simply buying rental properties, real estate investments demand more time and effort compared to stock trading. Everyday investors can easily access the stock market by funding a brokerage account and purchasing an exchange-traded fund without any lengthy processes.
Buffett appreciates this ease of investment, indicating that, despite operating on a larger scale, he prefers the streamlined nature of stock trading: “It’s much more advantageous when transactions can be executed quickly and efficiently,” he said. “I’ve been spoiled by this convenience, and I intend to keep it that way.”
