This study examines how extreme performance in the real estate market influences return comovement of stocks through the channel of investor inattention. We show that when the equity REIT index experiences extremely high or low returns, investors’ limited attention is diverted away from firm-specific information, causing individual stock returns to move more closely with the aggregate stock market. This effect is amplified following the establishment of real estate as a standalone sector and is more pronounced among stocks with a higher concentration of retail investors. We further show that the increase in stock return comovement with the stock market is not driven by investor sentiment, bear markets, or recessionary periods. Additional analyses using investor search behavior, alternative definitions of extreme performance, lagged real estate returns, and the home price index provide consistent evidence supporting the investor inattention mechanism. Finally, we document that the increase in stock return comovement is weaker during periods of extremely high real estate returns, suggesting that asset reallocation may partially offset the inattention effect.