Boston luxury condos
How will President Trump’s tariff impact the Boston luxury condo market? The new tariff on steel and aluminum materials will add cost to construction of all new condo developments. So, when developers are building new condos in the Seaport District; think foundation, rebar, framing all those added tariff taxes towards the development of these projects. Meaning, when new construction gets more expensive that cost is going to be handed down to the Boston condo buyer.
The National Association of Home-builders was among several trade organizations that spoke out against the tariffs, or import taxes, announced last Thursday. That’s because as stated, higher steel costs would raise construction costs for its members, which could eventually be passed on to home-buyers.
The construction industry is no stranger to tariffs. In April 2017, Trump slapped the first tariffs of his presidency on five Canadian lumber companies, ranging between 3% to 24%. The main wood imported to US from Canada is Douglas Soft Fir which is used framing everything in housing.
Further tariffs can also inflate interest rates faster, more expensive acquisition on land, so bundle this up your purchase price for that condo are going to have to rise, or be halted.
Even if the effect on Boston luxury condo purchase is minimal, there are several other pressures facing homebuilders.
They’ve long cited rising land and labor costs as barriers to new construction.
For homebuyers in many cities, like Boston, the affordable-housing shortage has created fierce competition, and people are increasingly entering bidding wars on houses they’ve never seen. Mortgage rates are rising; the national average on Friday was 4.28%, up from 3.85% on January 1, according to Bankrate.com.
If you have any questions about the Boston luxury condo market please call me at 617-595-3712.
Updated: 1st Quarter 2018