REITs are derivatives
With a derivative, you tend to be vulnerable to whiplash as your value is influenced by the change in a thing's value rather than its core value.
Here, let's take a look at the first random REIT's I checked, and see if their market behavior makes any sense.
^^ Vanguard VNQ domestic RE. Also paid $16.46 total dividends in that 5 years. *
^^ SCHH Schwab US REIT ETF. Also paid $2.40 in dividends. *
^^ SRET, an index fund of the Solactive Global Superdividend index, which just got mauled and never recoverd. Mind you this contains some international real estate. Paid $12.02 in dividends, a high outlier in proportion to value, which might explain some of the flaccid performance. *
^^ VNQI Vanguard Global ex-US Real Estate ETF mostly international. Paid $6.54 dividends *
^^ SRVR Pacer Data & Infrastructure REIT. Paid $3.17 dividends *
* Dividends are the total over 5 years. Divide by 5 for average annual dividends.
Do ANY of these look like the housing market???? WTH???
(that's not a headline. I'm yelling.)
In all these, look at the blip in March 2020 (COVID lockdowns). Think about that time. Real estate was mad as everyone was stuck at home, thinking about the limits and imperfections of their home, and doing their level best to move up or at least remodel/add-on. It was an exciting almost bonkers time in real estate. So if you owned a house, it was alright. Construction supplies went crazy in price because of remodeling and demand for new construction, coupled with production interruptions due to lockdowns and sick-outs as half a company got COVID at once... but the cost of building materials is not the largest part of overall home value.
There was a problem with evictions being suspended since "having a home" is the best way to slow down infection rate - very hard to contain COVID at shelters and food kitchens. But there were still severe consequences for renters who refused to pay rent, and if your rental business had prudent financial reserves, you should be able to weather it.
So if you were sitting on actual real estate, you were alright. That real estate was not going to drop in value, let alone by 70% for Pete's sake like that REIT did.
Land has intrinsic value even if the house falls down. An REIT has no intrinsic value, and can go to zero.
WHY THE F****? Well, right off the bat, what is an REIT? It's an investment that is traded. What is the fundamental characteristic of an investment that is traded, the most basic thing people who choose that investment are looking for? ROI - Return On Investment in the form of "income stream". REITs do not exist to answer YOUR question of "how do I secure equity in real estate?" They compete for investor dollars with other forms of investment, and investors are all about ROI on their time frame, which is relatively short. So the intrinsic value of the assets held do not get proper credit. The value of a house is what you can get for the house, from a home buyer. The value of the REIT share is what you can get for the share, from an investor. Investors have different motivations than home buyers.
On the upside, I've never had to replace a leaky toilet on SCHH.