Using long term data, Robert Shiller explains why land and homes have been disappointing investments in a piece for The New York Times. According to Shiller's data, American farmland and home prices increased only 3.1 times and 1.8 times respectively between 1915 and 2015. In contrast, GDP (gross domestic product) grew 15.5 times since it was first measured in 1929.
Shiller takes a look at why home prices and farmland have grown so slowly and for home prices decides supply and demand is a big part:
The supply response to increasing demand may help explain why real home prices nationwide fell 35 percent from 2006 to 2012 (and even more in some cities). Investment in residential structures in the United States was at near-record levels as a percentage of G.D.P. just before the price declines. Prices have been rebounding since then — and so has construction of new houses.