[lotsofpulp]

$50k downpayment on real estate has a lot more risk and a lot more work than $50k in an index fund, hence the possible higher return. It's up to the investor to determine their risk profile and whether or not they want to invest time in buying and selling real estate, finding and dealing with good tenants, maintenance issues, liability issues, spending time figuring out tax incentives and/or spending money on accountants.

There is no guarantee that property values will go up, or even stay stable. Ask the people in NJ/CT/IL/KY and other non-booming places facing skyrocketing property taxes and stagnant home sale prices. Who knows, maybe an earthquake erases all those plump west coast gains tomorrow. The index fund investment is placing bets on economic activity as a whole, not picking winners and losers of real estate markets.