Positioning for the Long Term in a Shifting Market | August 2025
As we move into the second half of the year, the real estate landscape remains complex, and is defined by cautious optimism, persistent headwinds, and our long-term belief in the fundamentals of high-barrier markets like Southern California.
Buyer Behavior in Southern California
The Orange County Register recently discussed the widening gap between renting and owning in Southern California.(1) In Los Angeles and Orange County, the average monthly rent for a single-family home is $4,462, while the monthly mortgage payment for an average home is $6,315. The impact of the $1,800+ difference is seen in the continued slowdown in homebuying activity.
Cost is just one aspect of this buyer behavior, and flexibility is another.
We see this trend in the projects at Integris Real Estate Investments’ parent company, Shopoff, including the luxury apartments at One Uptown in Newport Beach. There are residents today paying $14,000+ per month when they could purchase a home for a similar or lower amount. Instead, they prefer the convenience, service, and mobility that high-end rentals provide.
Despite ongoing market dynamics, buyer interest in homeownership remains. According to another article by the Orange County Register, the region’s median home price reached $820,000 in March and continues to climb. Yet, Southern California continues to attract prospective homeowners, with over 13,000 homes sold and a notable decline in listing inventory during the same month.(2)
Challenges and Considerations
The current real estate environment is presenting immense challenges for firms like ours. Insurance costs are rising, inflation remains persistent, and affordability pressures are mounting. Renters are pushing back on pricing, and we are seeing this across all product types.
We are also closely monitoring the impact of national immigration policy. California’s housing market depends on a large and diverse labor force. If even a fraction of the hundreds and thousands of undocumented workers were removed from the state, the resulting disruption to demand and occupancy could be significant. This is a broader economic concern that extends beyond housing and into the health of the regional economy.
Our Current Focus and Looking Ahead
At Shopoff Realty Investments, we are continuing to invest in high-barrier-to-entry markets with long-term growth potential like Orange County. We have several projects in progress in this area, including the redevelopment of a former Amway building in Buena Park, which is set to become single family homes with an affordable housing component. Also, the transformation of a former strawberry field in Fountain Valley into 304 market-rate apartment units, 83 senior affordable units, 36 two-story for-sale triplexes, and 183 three-story for-sale townhomes. Both communities’ for-sale components have already garnered interest from potential buyers. These are just two examples that demonstrate our deep commitment to our company mission, and we are optimistic we will continue to drive these projects forward with our team.
We remain hopeful about the long-term fundamentals of our market and stay realistic about the short-term headwinds. We are buying and holding where it makes sense and staying disciplined in our underwriting. The second half of the year will bring new challenges and opportunities, and we are prepared for both.
Disclosures
(1) Sourced from The Orange County Register at https://www.ocregister.com/2025/06/23/rent-vs-buy-la-orange-county-renters-might-save-105000-over-5-years/?clearUserState=true
(2) Sourced from The Orange County Register at https://www.ocregister.com/2025/05/20/southern-california-home-prices-rise-even-as-buying-sputters/
The information provided pertains to the activities and projects of Shopoff Realty Investments, L.P. and its affiliates (or “third-parties”) that may be unrelated to any investment offerings by Integris Real Estate Investments.
This newsletter is for informational purposes only and does not constitute investment advice or an offer to buy or sell securities. Statements reflect the current views of management and are not guarantees of future performance or project success. The examples discussed herein are for illustrative purposes only and do not represent all projects managed by Shopoff Realty Investments.
This is not an offering to buy or sell any securities. Such an offer may only be made through the offering memorandum to qualified purchasers. Any investment in Shopoff Realty Investments programs involves substantial risks and is suitable only for investors who have no need for liquidity and who can bear the loss of their entire investment. There is no assurance that any strategy will succeed to meet its investment objectives. The performance of this asset is not indicative of future results of other assets. Securities are offered through Shopoff Securities, Inc. member FINRA/SIPC.
