What’s Happening with Tariffs in 2025?
The U.S. has proposed new and increased tariffs on critical construction materials such as lumber, steel, aluminum, and even appliances and solar panels. While this may seem like just another economic headline, the ripple effects on the California housing market—particularly in markets with new builds or recent renovations—are very real.
These aren’t fringe materials. They’re at the core of every renovation, ADU, or new construction project from San Diego to Santa Barbara.
Who This Impacts
These tariffs will create a cost shift that affects more than just developers:
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Buyers seeking new construction homes
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Sellers with recently renovated or upgraded homes
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Investors managing flip or ADU projects
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Builders already battling labor shortages and inflation
Tariffs increase costs for materials, which in turn drives up construction budgets, delays projects, and narrows margins for investors and developers. In areas like Ventura County, Central California, and Los Angeles outskirts, where new development is active, we expect the effects to be felt first and most sharply.
What It Means for Home Prices
The cost of building is rising—but the existing housing stock isn’t growing fast enough. That means move-in ready homes with upgrades could become even more valuable as buyers shift their focus to what already exists rather than what needs to be built or finished.
If you’ve renovated your kitchen, replaced your roof, or installed new appliances recently, those investments may now carry even more weight when pricing your home.
Buyers may begin to prioritize homes with updated systems or modern finishes over projects that require construction—especially in a tariff-inflated environment.
Strategic Moves in 2025
→ For Buyers
Lock in pricing and interest rates where possible. Ask about escalation clauses in new construction contracts and prioritize resale homes with high-quality upgrades.
→ For Sellers
Highlight the value of your updates. Pricing your renovations into your listing could give you an edge—especially if the alternative for buyers is costly construction or uncertain project timelines.
→ For Investors
This is the year to get precise about your numbers. Prefab options, modular builds, and sourcing local materials could help balance out new tariffs. Also, consider the timing of resale—holding until Q3 or Q4 might make financial sense as the market adjusts.
The Bigger Picture
Tariffs are one of many economic shifts affecting how and where we live. At Coastline 840, we track these changes to help our clients make smarter, more informed decisions—whether you're buying in Los Feliz, selling in Santa Barbara, or building on the Central Coast.
Want to explore how these changes might affect your next move? Maybe it's time for Luxury Downsizing?
Contact us to talk strategy and next steps.
