Case Shiller is a weighted national index. The data by city shows that between 01/2000 and 09/2011, average real estate prices in 11 cities grew less than inflation, 4 kept even, and 5 rose more than inflation.I am pretty sure that Real Estate return is accurate since the Case Shiller index starts at 100 as of Jan 2000 and is currently at 141.3. The stock returns on your chart don't correspond with the Morningstar numbers (I suspect they ignored dividends and maybe some other things).
Shows the total return of 10K invested on Jan 1,2000 to Sept 1, 2011
Dow $13,117
S&P 500 $10,153
VFINX $10,047 (Admiral shares would higher)
Nasdaq Composite $12,201
Now it require $13,149 today purchase $10K worth of goods in 2000. So the only investment that beat inflation since 2000 was Real Estate. I guess the best horse in the glue factory.
Detroit 73
Las Vegas 94
Atlanta 96
Cleveland 100
Phoenix 100
Charlotte 112
Minneapolis 114
Dallas 116
Chicago 118
Denver 125
Tampa127
San Francisco 133
Portland 136
Seattle 136
Miami 139
San Diego 153
Boston 154
Los Angeles 168
New York 170
Washington 188
Real estate in a couple of cities were profitable investments. The others never left the glue factory.