Earlier this month, Jackie Han, an audience member at the Berkshire Hathaway annual shareholder meeting, stood to ask a question of company chairman and CEO Warren Buffett. “As you might guess, coming from a Chinese family, we always had a soft spot for real estate,” Han said.

Plenty of Americans feel the same way. Each year, Gallup asks U.S. adults their preferred investment for long-term returns, and for 12 consecutive years, real estate has been the most popular answer. This year, 37% of those surveyed identified real estate as their top choice, compared to just 16% who chose stocks.

What does the world’s most celebrated long-term investor think? Han was determined to find out. “Why are you still buying stocks instead of more property?” he asked.

In his answer before a packed arena in Omaha, Buffett noted that his long-time right-hand man Charlie Munger had a fondness for real estate deals, especially later in life. But it was little more than a hobby, Buffett said.

“I think if you’d asked him to make a choice when he was 21 — either be in stocks exclusively for the rest of his life or real estate for the rest of his life — he would have chosen stocks,” Buffett said. “There’s just so much more opportunity, at least in the United States, that presents itself in the security market than in real estate.”

The stock market’s performance over the past four decades bolsters Buffett’s argument. Since the beginning of 1988, the S&P CoreLogic Case-Shiller U.S. National Home Price Index, which measures residential real estate values, has risen by 374%. Over the same period, the S&P 500, a proxy for the broad U.S. stock market, is up 2,218%. Add in reinvested dividends, and the total return rises to 5,006%.

Past performance is no guarantee of future results. Still, Buffett’s faith in the upward trajectory of U.S. businesses hasn’t wavered. At the 2025 Berkshire meeting, Buffett underlined his continued optimism in the stock market and chalked up much of his success to having been born in America.

“If I were being born today, I would just keep negotiating in the womb until they said I could be in the United States,” he said.

A company with Berkshire’s resources has the ability to invest in all different kinds of real estate, not just single- and multifamily homes. Were he to focus on real estate, Buffett could, presumably, outperform the average rise in home prices.

That’s where the Oracle of Omaha’s other main hesitation with real estate factors in: Buying property is often a hassle.

“When you walk down to the New York Stock Exchange, you can do billions of dollars worth of business, totally anonymous, and you can do it in five minutes. The trades are complete when they’re complete,” Buffett said. “In real estate, when you make a deal with a distressed lender, when you sign the deal, that’s just the beginning. Then people start negotiating more things, and it’s a whole different game with a different type of person who enjoys the game.”

That distinction is relevant to anyone hoping to build wealth. Whether you’re doing Berkshire-sized land deals or buying a rental property, investing in real estate requires much more of your time and attention than buying and selling stocks.

After all, for the everyday investor, gaining access to a broad swath of the stock market is as easy as funding a brokerage account and buying an exchange-traded fund. No down payment, broker or bank approval required.

Buffett appreciates that simplicity — even if his company functions on a much larger scale.

“We find it much better when people are ready to pick up the phone and you can do hundreds of millions of dollars worth of business in a day,” he said. “I’ve been spoiled. But I like being spoiled, so we’ll keep it that way.”

Want to boost your confidence, income and career success? Take one (or more!) of Smarter by CNBC Make It’s expert-led online courses, which aim to teach you the critical skills you need to succeed that you didn’t learn in school. Topics include earning passive income online, mastering communication and public speaking skills, acing your job interview, and practical strategies to grow your wealth. Use coupon code MEMORIAL to purchase any course at a discount of 30% off the regular course price (plus tax). Offer valid from 12:00 am Eastern Time (“ET”) on May 19, 2025, through 11:59 pm ET on June 2, 2025. Terms and restrictions apply.

Plus, sign up for CNBC Make It’s newsletter to get tips and tricks for success at work, with money and in life, and request to join our exclusive community on LinkedIn to connect with experts and peers.