Though few Boston condo for sale developers want to talk about it (at least with me), the expectation is that tariffs on materials like imported steel, aluminum and lumber will drive up costs, causing a reduction in net operating income. 

“Some developers and contractors were pre-buying materials before the election and stockpiling them. Other developers didn’t believe they would happen,” said Suzanne Amaducci, who chairs the real estate and finance practice at Bilzin Sumberg. 

“What [the tariffs] are going to be at the end of the day, I don’t know,” she added. 

In February, homebuilder sentiment dropped to its lowest level in five months, in part due to mounting concerns over tariffs, elevated mortgage rates and construction costs, according to an index by the National Association of Homebuilders. Even billionaire hedge fund manager Ken Griffin has spoken publicly about the negative effects of Trump’s tariff policies. 

Boson condo worker deportations

Deportations are also expected to hit the construction workforce hard. Contractors and subcontractors will feel the pain, as they have to honor costs outlined in their contracts with developers. And developers, for the most part, are still incentivized to work with their contractors and subcontractors to ensure their projects get completed, even if that means spending more. 

While Boston isn’t immune to these effects of the Trump presidency, its real estate market is still outperforming that of other major cities in the U.S. And in other ways, the region is benefitting from a big Trump bump. (See our story on the post-election boost in ultra-luxury resi deals.) 

Overall, Amaducci and others expect interest rates will stabilize, leading to more predictability, which is good for commercial real estate and new development. 

“If that’s the case, then it’s finally time to reprice all of these assets that have been out there,” she said. “Everyone’s biggest excuse was the election, and guess what? Now it’s over.” 

Source: The Real Deal

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