Uncertainty over new tariffs is troubling home builders and developers in Southern California, particularly in areas affected by the January wildfires. Builders are struggling to budget for rising costs, unsure of which materials and appliances will be affected by tariffs and when these will take effect. This uncertainty is forcing contractors to make quick purchasing decisions, especially for items like windows, doors, and plumbing fixtures, which are subject to high duties, especially those imported from China, which face a 145% duty.
Cory Singer, a general contractor working on rebuilding projects in Pacific Palisades, said, “We’re padding a 5% to 10% contingency for what we’re calling ‘market volatility’ into the budget.” He noted that prices for customers are already rising, and some clients are considering storing materials on-site to avoid future price hikes. The wildfires have ignited a construction boom around Los Angeles, but builders are already facing material shortages and higher costs for items like lumber and bathtubs.
The National Association of Home Builders (NAHB) expects new tariffs, effective April 2, to raise the cost of imported construction materials by over $3 billion. Peter Tateishi, CEO of the California chapter of the Associated General Contractors of America, remarked, “We’re already seeing increases on the costs of lumber and gypsum over the last month.” The tariffs are expected to add $9,200 to the cost of building a home, according to Robert Dietz, NAHB’s chief economist.
Builders are considering pre-buying materials to avoid anticipated price hikes, but Todd Tomalak, a building products adviser, warns of potential inventory issues due to slower-than-expected demand. Some builders are exploring alternatives to Canadian lumber, looking to Germany and Scandinavian countries for supplies. The construction industry is closely watching the spring selling and remodeling seasons to gauge the impact of these tariffs.
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