The Tariffs Have Come for New York City Real Estate

Trump’s prices scare buyers, sellers, home manufacturers and suppliers, causing a general break on the market.
Photo-illustration: brake; Photo: Getty

Last week, Holly Mumford, architect and founder of Heraabout, a company that sells Predefined house planssaw several alarming signs that his company and the home construction company in general can be in trouble. Immediately after the entry into force of Trump’s prices, she received an email from Form, a company from German manufacturing cabinets with which she often works, saying that she would not take new orders for the moment. Then, an external coating company that she uses told her that she would also arouse her projects. Meanwhile, requests from new customers – she generally champions two or three introductory calls per week – have stopped completely. People, of course, are currently wary of projects. But Mumford says that she is the most nervous for people half-construction and in contracts for materials: “I don’t know how it will work. I can see him become disorderly.” By providing that construction will cost much more due to prices, it tries to find ways to limit expenses and make costs more predictable for future customers – people with money to build a 2000 square feet house, but not necessarily to hire an architect – such as offering smaller house plans and repainting the structural load to use thinner beams. But as his plans were already designed with an affordability in mind, there is not much fat to cut. “I don’t know if the things I watch now move the needle enough, but I will try,” says Mumford.

The real estate industry entered 2025 with a good amount of optimism. After years of sclerotic sales, inflation and high mortgage interest rates that have slowed down a new construction and pushed property out of reach for many Americans, things finally turned. The predicted recession in 2023 did not end up and in New York, Contractual signatures were considerably increasing: “We have seen it since the summer and in the new year – sales increased the inventory rate four times,” said Jonathan Miller by Miller Samuel, who previously dowed 2025 the year of return to normal. “Many people have been waiting for years for the prices to drop and they have decided that they were not going to wait. Then we had that. ” This, of course, being the Trump prices, which have Roll the stock markethas considerably increased renovation and construction costs, and has frightened almost everyone. “The agents tell me that their customers hold – no one knows what will happen,” said Bess Freedman, CEO of Brown Harris Stevens. “One of them was a buyer of $ 10 million: they said:” We take a break “. This does not necessarily mean that they will not return to the market. But consumer confidence is in the toilet. Freedman says that last week, she thought there could be upward advantages of prices, such as the drop in interest rates. But now, all optimism has disappeared: “It seems disorganized and chaotic, and uncertainty and chaos are not good for any market,” she said. “It is no longer a pressure on an already tense housing market.” Miller agrees: “It’s a peak of uncertainty. Uncertainty has an uncertainty. “

But the broker Jacob Wood, an associated broker at Coldwell Banker Warburg, says that because of its wealth, New York is more isolated than the rest of the country from major economic changes, it is therefore unlikely that we will see drastic changes; During the last recession and the start of Cavid, the prices of the houses remained quite stable. “The reaction of the market in New York to these types of events is less a drop in prices than a drop in activity,” he says. “I think we will see a drop in stocks and fewer contracts signed.” In other words, a return to the disappointing market of recent years. Robert Elson, another agent of Coldwell Banker Warburg, has already seen it. “I have two customers who deliberate the listing early this spring – now or shortly. For the moment, they are both of the state of mind that the expectation is preferable to act “prematurely”, he wrote in an email.

While people on the side of design-construction, like Mumford, are already seeing problems with suppliers and new businesses, the future of new construction in general seems dark with prices likely to Increase the cost of construction And the administration’s immigration policies reducing the mainly immigrant workforce in industry. Anthony Luna, CEO of Co-side capitalA business and management consulting company, says that as soon as the prices have entered into force, they have seen significant price increases of 15 to 25% on certain projects. “And it was last week. If he follows with the threat of 50% additional prices on China, it will not only be more price increases: we will see heists from the supply chain worse than during COVVID.” And these cost increases will be for almost everything – Canada wood, Chinese electric supplies, the devices assembled here with overseas parts. The costs which will of course be transmitted to buyers and tenants. Properties maintenance costs will also increase. The rents, which are already at peaks of all time, will increase almost certainly even more, as owners’ expenses will increase, that the new construction slows down and that sales are falling, increasing demand.

Everything will not stop, explains Eli Weiss, director of Joy Construction, who develops a lot of affordable and mixed accommodation. “Most of the projects that are under construction at the moment, the materials were bought last year, not last week,” said Weiss. The drop in interest rates could balance the increases in construction costs, he adds, and everything could change tomorrow: “I do not have the impression that these policies are established in stone.” However, he admits: “If I was going to buy a job today, I would go with significant cost increases.” And, he adds: “I would do everything I could not to lock a price now.” For the moment, it seems, everyone hopes that Trump, known for his irregular policy, could change his mind before entering a recession, unemployment unemployment and damage become permanent. Another developer who specializes in conversions has written in an email that, like everyone, always treats the new prices and that “things hope that things will be developed”.