Macroeconomic reasons to invest in real estate (versus stocks)

[Sara Abernethy]

Can anyone direct me to any good (sourced) charts/graphs that show why buy&hold real estate is a much better investment in the long term than the stock market?  Pulling together a presentation and wanted to show a killer data point or graph.  I have seen these data points in hard money lender presentations, but I don't have anything in digital form to reference.  

[David Faulkner]

There is no macroeconomic reason that I know of ... in fact, all the data that I've seen is that on average REI offers at best comparable returns to the average stock (S&P 500 index) and at worst the returns are lower. Lesson learned: don't be average. The reasons for investing in RE IMO are that it is a less efficient asset class and as such if you are a skilled investor, it is much easier to create "alpha" from investing in RE as it is investing in stocks. Also and related, with RE you can do forced appreciation ... I bet more than a few times stock investors had wished that they could force the value of their stocks to go up :) The downside is that forced appreciation takes work, so you have to factor to what extent your returns are from your labor vs from the investment. Take away your ability to create alpha and force appreciation, and you might as well just invest in the stock market or buy a REIT IMHO, and this is coming from a real estate investor. In that context, what REI offers you is diversification, which is also valuable, but don't count on beating the market.