Three Thoughts on the Tariffs and the OC Real Estate Market

Three Thoughts on Tariffs and the OC Real Estate Market

Tariffs are a hot topic right now.  But how might these uncharted changes impact our local Orange County real estate market? Tariffs on imported goods, particularly building materials like lumber, steel, and appliances, have the potential to cause ripples in the United States housing market. While these changes may feel unsettling to buyers and sellers, Orange County’s real estate market has historically demonstrated resilience, even during periods of economic uncertainty.

So, is Orange County still a solid investment in light of current tariff uncertainty?

1. Orange County’s Demand Remains Strong

Orange County continues to be a desirable place to live, offering a unique blend of coastal and suburban living, great schools and universities, proximity to major business hubs like Irvine, Costa Mesa, Newport Beach, the Port of Los Angeles and even the renown city of Los Angeles. The county offers everything from exceptional cultural and performing arts centers to an ideal climate that allows year round outdoor enjoyment.  Simply put, it's a place a lot of people like to call home for a variety of reasons. So despite possible pending global economic fluctuations, local demand for homes in this area remains, and is expected to continue to remain, high. The region's consistent desirability helps ensure long-term value for real property in Orange County.

2. High Demand for Rentals

For investors, rental demand in Orange County remains robust, with a large population of professionals, students, and families seeking rental properties. Even if we see construction costs rise due to tariffs, the strong demand for rental housing and low vacancy rate should help buffer any price volatility, making rental properties an attractive investment. Additionally, California’s complex and intricate rent control laws (aka, rent stabilization or tenant protection laws) should also continue to contribute to reduce the rental housing supply as many landlords take rentals off the market and seek refuge in landlord friendly states.  The silver lining? If you can properly navigate being a landlord in California, it can be lucrative due to high demand, lack of supply and historical housing price and rent appreciation.  

3. The Long-Term Perspective

While tariffs may lead to temporary uncertainty in the market, real estate is typically a long-term and unique investment. The fundamental factors that make Orange County an attractive place to live — a desirable climate, thriving economy, and access to top-tier amenities — are unlikely to change. For those with a long-term outlook, Orange County remains a promising place to both call home and to invest.

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