Tariff, Tariffs, Tariffs.... That is ALL we have heard in the news and I know it could possibly sound daunting for these uncertain times ahead. I wanted to provide some clairty and help to the Orange County homeowner's and future homeowner's about Trump's new tariff Proposal & how it could impact the Orange County Real Estate Market—And Why Now Might Be the Best Time to Buy a home!
If you’ve been dreaming of purchasing a home in Newport Beach or anywhere in Orange County, there’s a new economic curveball on the horizon that could impact your plans: proposed tariff policies from our President, Donald Trump.
Now, before your eyes glaze over (we get it—tariffs aren’t exactly beachside margarita conversation), let’s break down how this could affect the real estate market—especially if you're thinking about building a home or buying new construction.
1. Construction Costs Are Going Up
Trump’s proposed tariffs could place higher duties on imported goods, including vital building materials like lumber, steel, and aluminum. Translation? The cost to build a home in Orange County—already not exactly pocket change—could increase drastically! Builders often pass these costs directly to buyers, making new homes more expensive.
2. Interest Rates May Follow Inflation
Tariffs can trigger inflation as the cost of goods rises. In response, the Federal Reserve may raise interest rates to cool things down. That means mortgage rates could inch upward—again—making it more expensive to borrow money for your next home. Buying now could mean locking in a lower rate before things heat up. They could also improve in the long run as the whole purpose of the tariffs is lower our direct costs and place more money in the United States. We just don't know how mortgage rates will be affected based on the fact that this has never been done in majority of any of our lifespan.
3. Homebuilding Could Slow Down
If costs rise and profit margins shrink, many builders may choose to hit pause. Fewer homes being built means lower inventory, which can lead to higher home prices—especially in high-demand areas like Newport Beach. It’s simple supply and demand, and if you’ve ever been in an Orange County bidding war, you know what we’re talking about. I used to tell people at Open Houses, welcome to the Hunger Games (to add a little bit of humor to the bidding war situation).
4. Uncertainty Could Spook the Market
Let’s be honest—economic uncertainty doesn’t exactly make people want to make big financial moves. When consumers and investors get nervous, markets slow. But here’s the silver lining: buying during uncertain times often means less competition and better deals—especially if you’re ready to act confidently when others hesitate. You could potentially have the seller pay your closing costs, offer less for the home, make sure you are in the right neighborhood and renovate after the purchase. And as a home seller, downsizing may be a great option. All the costs associated with homeownership like insurance, property taxes, maintenance expenses are all factors to take into consideration to limit your monthly costs. If you're old bedrooms are now storage facilities, it might be the right time to consider changing the size of your home.
5. Foreign Investment May Shrink
Historically, Southern California (including our beloved Newport Beach) has been a magnet for foreign investors. However, increasing tariffs and trade tensions might discourage international buyers. While that could temporarily cool off the ultra-luxury sector, it also creates an opening for local buyers to grab prime real estate without overseas bidding wars.
So, Should You Buy Now?
If you’re considering purchasing a home in Orange County, the stars might be aligning in your favor—for now. Waiting too long could mean higher prices, higher interest rates, and fewer options. Whether you’re eyeing a newly built home, a luxury listing in Newport Beach, or planning on building a home yourself, this might be the time to make your move before the policy changes kick in.
After all, when it comes to real estate, timing is everything—and in a market as dynamic (and sun-kissed) as Orange County, smart buyers don’t wait… they act.
