According to a Gallup poll, real estate is the preferred long-term investment for 36% of Americans, followed by stocks (22%), gold (18%), savings accounts (13%), bonds (4%), and cryptocurrencies (3%).
What drives this? Let’s take a deeper look and understand why real estate is the preferred method for building long-term wealth, according to the majority of people.
The Popularity of Real Estate as a Long-Term Investment
Real estate has maintained its position as the preferred long-term investment choice for about 11 consecutive years, according to Gallup’s annual Economy and Personal Finance survey.
The preference for real estate exists because of multiple reasons:
- Real estate is a tangible asset because one can physically interact with it. Real estate offers an unmatched sense of security because it exists as a physical asset that most homeowners really enjoy. I personally enjoy receiving a monthly check from my tenants, which helps pay down my mortgage on my multi-unit property while building equity.
- Real estate values have demonstrated steady growth throughout history. Based on the data, homes have demonstrated consistent price growth from the 1990s to the 2020s, thereby establishing themselves as reliable investment opportunities.
- Real estate ownership provides both financial returns and personal residence benefits to investors. It stands alone in offering these advantages, which enhance its attractiveness.
The Gallup poll indicates that people across all income brackets share this preference: 33% of lower-income households, 36% of middle-income households, and 40% of upper-income households selected real estate as their top long-term investment.
Real Estate vs. Other Investments
Real estate is a preferred investment for many, but investors should evaluate its performance relative to alternatives. Stocks have traditionally provided investors with higher returns. The S&P 500 increased by 1,325% from 1990 until April 2024, but CoreLogic Case-Shiller U.S. National Home Price Index rose by 308% during the same period.
Stocks exhibit greater price volatility in their market performance. Real estate properties deliver steady growth patterns to investors. Investing in real estate demonstrates strong recovery patterns during economic downturns, including the Great Financial Crisis of 2008.
Historical data show that U.S. home prices have experienced steady growth throughout each decade.
U.S. home price growth by decade:
- 1990s: +30.1%
- 2000s: +47.3%
- 2010s: +44.7%
- 2020-2024: +47.1%
Home prices in the local area have increased by 5.3% over the past year and are now about 68% above their 2020 levels.
Real Estate vs Stocks in San Diego: What’s Different Here?
San Diego is not a typical market. That matters when you compare real estate vs stocks. Inventory is tight. Land is limited. Demand stays strong.
In walkable metro neighborhoods like North Park, South Park, University Heights, Normal Heights, and Golden Hill, lifestyle demand supports long-term values. These are “live here on purpose” neighborhoods. That matters for long-term investing.
Real estate also gives you control. You can renovate. You can improve the layout. You can add income. That is forced appreciation. It’s one reason San Diego real estate investing looks different than buying stocks.
ADUs matter here, too. If you’re buying for long-term value and future income, ADU potential changes the math. See our guide:San Diego ADU options.
And rental demand stays strong. That includes long-term rentals, multi-unit properties, and homes with ADU income. So when people compare real estate vs stocks, real estate often wins on stability + utility.
If you’re deciding between stocks and real estate, focus on the real numbers. Neighborhood. Property type. Monthly cashflow. Long-term upside. If you’re weighing a personal home decision too, read:Should You Sell or Rent Out Your House?
Want the real estate vs stocks numbers for San Diego?
If you want a clear comparison, we can run the numbers for your situation. Not national averages. Real numbers for San Diego real estate.
McT Real Estate Group helps buyers, sellers, and investors inNorth Park, South Park, University Heights, Normal Heights, Golden Hill, and nearby metro neighborhoods.
Quick options:
- Free San Diego home valuation
- Request a San Diego investment snapshot
- Browse San Diego homes for sale
Call/Text: (619) 736-7003
Bilingual support: English + Spanish + Japanese.
If you’re deciding between investing in stocks or buying real estate, the best answer usually comes down to the numbers. That’s why looking at the specific neighborhood, property type, and long-term plan matters more than any national headline. If you’re torn between selling, renting, or holding, this article pairs well with “Should You Sell or Rent Out Your House?“
Is Real Estate the Right Investment for You?
The San Diego real estate market offers excellent long-term investment opportunities. Examine your circumstances before starting your real estate investment journey.
- The purchase of a home represents a long-term financial decision. The investment does not suit people who intend to relocate within a short period. In fact, if you plan on moving away in 2 to 3 years, I would recommend renting instead.
- Real estate ownership requires financial resources for down payments, closing expenses, and continuous maintenance costs. Your financial stability needs to be strong before making this investment.
- Your investment targets should guide your decision-making process. Your investment goals for high returns and easy money access might require choosing different investment options.
Diversification helps create a balanced investment strategy. Financial experts advise investors to distribute their assets across multiple investment types to protect against market fluctuations and boost their chances of achieving long-term profits. Real estate should be integrated into a portfolio that contains stocks, bonds, and other investment vehicles.
Bottom line
The results of polls indicate Americans choose real estate for long-term investment, but there is no single solution. Before making investment decisions for your future, you should consult your financial advisor because the most suitable option depends on your financial objectives, risk tolerance, and investment duration.
Frequently Asked Questions
Is real estate better than stocks long-term?
Real estate vs stocks depends on your timeline and goals. Stocks can grow fast, but volatility is real. Real estate offers leverage, control, and loan paydown. Long-term, many people use both.
Is real estate safer than stocks?
Real estate can feel safer because it’s tangible. You can live in it. Improve it. Rent it. Stocks are liquid, but prices swing daily. Real estate vs stocks comes down to risk tolerance and time horizon.
What is the biggest advantage of real estate vs stocks?
Leverage and control. With real estate, a down payment can control a larger asset. You can renovate and force appreciation. You can add income. Stocks do not offer the same level of control.
What is the biggest advantage of stocks vs real estate?
Liquidity and simplicity. Stocks are easy to buy and sell. Index funds can be low maintenance. Real estate takes more effort, more cash reserves, and higher transaction costs.
Is San Diego real estate a good long-term investment?
San Diego real estate is supported by limited land and steady demand. Metro neighborhoods like North Park, South Park, University Heights, Normal Heights, and Golden Hill stay popular. Markets move in cycles, but location demand is a long-term advantage.
Should I invest in stocks or buy real estate first?
Start with your next 3-5 years. If you want flexibility, stocks may fit better. If you want stability and long-term equity, buying a home may fit better. Many people do both over time.
Does real estate protect against inflation better than stocks?
Real estate can benefit during inflation because rents often rise over time. Fixed-rate mortgages can get easier to pay over time. Stocks can also perform well, but the path can be bumpy.
Can an ADU improve real estate returns in San Diego?
Yes. An ADU can add income and flexibility. It can increase buyer demand. In San Diego, ADU potential can change the math when comparing real estate vs stocks
This article is for educational purposes only and isn’t financial advice. If you want a San Diego-specific breakdown, McT Real Estate Group can provide a neighborhood-based snapshot.
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