Real estate is no longer the wealth builder it once was — but is it a bad investment?

"On real estate, it's so much harder than stocks," he said at Berkshire Hathaway's 2025 shareholder meeting. (1) "It's so much harder than stocks in terms of negotiating terms and time spent . . . when real estate gets in trouble, you find out you're dealing with more than just an equity holder."

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Buffett now says real estate investing is a tough task, at least relative to stock market investing. When you're investing in real estate , he noted, you're dealing with several components, including third parties that are anxious about letting a property go and will fight over every line on a home sales contract.

"You have a single owner or a family that has owned for a long time," he said. "To them, it's an enormous decision to sell, but if you go to the New York Stock Exchange and make billions of dollars anonymously and you can do that in five minutes . . . It's a whole different game."

Buffett does say his company has done a few real estate deals "that came our way in 2008 and 2009," but the time it took to close the deals was not worth it. Yet the fact that real estate deals "can take forever and negotiations can take years" should prompt regular investors and homebuyers to take the same stance.

Maybe not, especially considering it's no longer the easy wealth-building investment it was from roughly 2012 to 2022.

Take the latest round of data from the S&P Cotality Case-Shiller Home Price Indices (2), which concludes the current U.S. housing market has basically slowed to a halt, with U.S. homes declining by 0.1% in April 2026.

"April's figures confirm that U.S. home prices remain essentially flat, with the S&P Cotality Case-Shiller National Home Price Index up a scant 0.8% year over year, just above March's 0.7% pace," said Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones Indices. "With inflation accelerating to 3.8% in April, U.S. home values have now declined in real terms for an 11th straight month, further eroding inflation-adjusted housing wealth."

Other industry data points indicate U.S. mortgage rates still hover above 6%, increasing borrowing costs compared with the 2% to 3% loans many homeowners locked in during 2020-2021. Meanwhile, insurance, property taxes, maintenance, and HOA costs have risen in the last few years, reducing net returns for both homeowners and investors. Insurance premiums alone have increased dramatically over the past several years, rising by 46.8% from 2020 to 2025, with annual rate increases averaging 12.7% in 2025 and up another 6% in 2025, according to Lending Tree. (3)

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Those numbers are making life more difficult for real estate buyers, who can't seem to catch a break.

"We're getting a different kind of call lately, right, the people who first reached out and didn't end up selling are coming back now, and the math on where they're at has moved upward," Doug Van Soest, co-owner of SoCal Home Buyers Somewhere, told Moneywise.

Van Soest, who's been buying properties in southern California since 2008, says between 30% to 40% percent of his firm's deals start that way. "The buyers calling back lately hadn't really planned for higher purchase costs," he noted. That's a big problem for real estate buyers , who sit on the sidelines for a year or two, thinking rates will come down. "They might or might not, but you're still not where you were in 2021," Van Soest noted.

Skyrocketing insurance rates have also curbed real estate's investment appeal

In hard-hit California, Van Soest said the fire corridor markets his firm's work have seen insurance rates rise two or three times what standard coverage cost five years ago. "That number wasn't in anyone's calculation when they bought a property, and it catches people who did everything else right," he said.