The Stock Market vs. Real Estate: How They Have Performed Over the Last 30 Years

One of the keys to successful investing is diversifying your portfolio to include a mix of stocks, bonds, mutual funds, savings accounts, real estate and other assets.

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But what if you had to choose between individual asset classes, such as stocks or real estate?

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Stocks or Real Estate?

If you’re legendary investor Warren Buffett, you choose stocks. That’s what the Oracle of Omaha said during a recent shareholder meeting at Berkshire Hathaway, CNBC reported.

Buffett, who plans to step down as Berkshire Hathaway CEO at the end of the year, was asked during the meeting why he continues to buy stocks instead of more real estate property.

“There’s just so much more opportunity, at least in the United States, that presents itself in the security market than in real estate,” Buffett said.

That might come as a surprise to real estate investors who have seen home values more than double over the past decade or so, per Construction Coverage — until they realize that stock values have performed even better.

In fact, over the past 30 years, stock market returns have far outpaced real estate returns — and it’s not even close. This is certainly true of residential real estate. It’s also likely the case for commercial real estate.

Following is a look at returns for various indexes over the past three decades.

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S&P CoreLogic Case-Shiller US National Home Price Index

This index measures residential real estate values in the United States and is tracked by the Federal Reserve Bank of St. Louis. Its latest data goes through March 2025. Here is how the index has grown since March 1995.

• March 1995: 80.084

• March 2025: 327.679

• 30-year return: 309%

S&P 500

The S&P 500 is considered a bellwether of the stock markets and is used as a key gauge of the country’s overall economic and market health. Here’s how it has grown over the past 30 years.

• May 1995 close: 533.40

• May 2025 close: 5,911.69

• 30-year return: 1,008%

Dow Jones Industrial Average

The Dow is another key indicator of overall stock market health. Here’s its performance over the past three decades.

• May 1995 close: 4,465.14

• May 2025 close: 42,270.07

• 30-year return: 847%

Nasdaq Composite

The tech-heavy Nasdaq saw its value skyrocket during the 1990s with the global rise of personal computers, microchips and the internet. Since then, values have continued to soar amid an explosion in everything from e-commerce and social media to artificial intelligence and electric vehicles. Here’s how the Nasdaq has performed over the past 30 years.

• May 1995 close: 864.58

• May 2025 close: 19,113.77

• 30-year return: 2,111%

And the Winner Is…

As the above numbers show, the rise in home values/residential real estate have not been anywhere close to the rise in stock values over the past 30 years. Investors in other types of real estate — such as retail, office and industrial — might have seen strong returns over the years as well. But it’s doubtful those returns have matched Wall Street, either.

According to Elifin Realty, the typical commercial real estate investment return is between 6% and 12%. The upper end of that range puts it near or above the typical S&P 500 yearly return. But the lower end puts it well below stock market returns — and commercial real estate is vulnerable to much longer and deeper slumps than the stock markets.

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This article originally appeared on GOBankingRates.com: The Stock Market vs. Real Estate: How They Have Performed Over the Last 30 Years