How U.S. Tariffs Could Impact the Los Angeles Real Estate Market in 2025

Apr 16

In result of rising global trade tensions, tariffs are becoming the talk of the town, state, and nation. This fact may quietly shape the real estate landscape in ways both buyers and sellers might not expect. In early 2025, the U.S. government imposed new tariffs targeting imported steel, aluminum, and certain manufactured goods as a measure to to support domestic manufacturing and reduce reliance on foreign imports. What do tariffs have to do with buying or selling property? A lot more than you'd think. In this blog post, we’ll break down my Real Estate predictions of how tariffs will influence the market.

3 Key Ways Tariffs Can Impact the Real Estate Market

1. Construction Costs Are Rising (25% tariff’s on steel & aluminum imports)

Many of the materials used in California's residential builds—steel, lumber alternatives, and aluminum—are affected by import tariffs. Higher material costs mean:

New construction slows down
Renovation projects become more expensive
Developers pass increased costs onto buyers and tenants

This could reduce new housing supply in already competitive areas like Los Angeles and South Bay.

2. “Move-In Ready” Homes May See Higher Demand

With construction costs surging, buyers may avoid fixer-uppers or new builds and instead gravitate toward move-in ready homes. For sellers, this is a golden opportunity. If your property is updated and turnkey:

You may command a premium price
You could see faster offers from motivated buyers avoiding renovation headaches

Tariffs are shifting buyer preferences—sellers and landlords should take note.

3. Landlords and Investors Could Benefit

Rising costs often tighten housing inventory, which can drive up rent prices. For landlords, especially those with well-maintained units, this may increase rental income potential. Plus:

Investors who already own rental property may see higher ROI
Areas with lower development costs (or where homes are already built) may see more demand

That’s especially true in California markets where tenant demand remains high despite interest rate volatility.

How could this Impact Buyers?

For homebuyers, higher prices and limited inventory could create pressure. But it’s not all bad news:

Buyers looking at existing homes may find more stable pricing compared to new construction
Buyers will experience increased competition for homeownership in result of market shift and low inventory

If you’re a:

Seller with a turnkey home: You’re in a strong position to list soon and attract serious buyers avoiding renovation costs.
Landlord: You may want to reevaluate rent pricing or explore property upgrades that increase value without heavy construction.
Buyer: Focus on move-in ready homes or secure financing early to stay competitive in a market impacted by supply shortages.

My Final Thoughts

As the market continues to shift, it’s important to navigate selling or purchasing a home with a professional. Let’s connect to discuss your questions and align on how working with a Realtor can help you navigate one ofthe largest transactions in our lifetime. Click here for a FREE consultation.