Passive Impact: Real Estate Investing & Special Needs Housing
Welcome to "Passive Impact: Real Estate Investing & Special Needs Housing," where we explore how real estate investment can generate passive income while making a positive difference. Join host Sarah and Johnathon as they share strategies, success stories, and opportunities for investors looking to create financial stability and meaningful community impact. Also, Understand how you as a Real Estate investor make a positive difference in someone's life through Special Needs Housing for Adults with mild disabilities.
Passive Impact: Real Estate Investing & Special Needs Housing
Tariffs and Timber: The Hidden Cost of Your Dream Home
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Tariffs are significantly impacting the housing market by increasing construction costs and creating uncertainty for builders and buyers alike.
• Builder confidence at a seven-month low for new single-family homes
• Tariffs estimated to add $9,200 to the price of a new home
• 7% of products in new construction are imported and affected by tariffs
• Canadian lumber and Mexican gypsum specifically exempted from retaliatory tariffs
• First-time buyers concerned about the increased cost of appliances and fixtures
• Buyers being pushed further from city centers due to rising monthly costs
• Supply chain disruptions causing construction delays and additional expenses
• Significant tariffs remain in place despite some pauses, especially on Chinese goods
• Market uncertainty affects builder planning and potential housing supply
• Financial analysts recommend long-term investors stay the course despite market fluctuations
For expert consulting on starting your own special needs housing business, reach Flowers Associates at 901-445-8148 or visit flowersandassociatesbooking.com.
Introduction to Tariffs and Housing
Speaker 1Welcome to the Deep Dive. Today we're going to tackle something that really affects a lot of us Tariffs, specifically how they're shaking up the housing market, and you know the cost of things we put in our homes.
Speaker 2Right, it touches everything.
Speaker 1Yeah. So, whether you own a home, maybe you're thinking about buying, or you're just curious about well, what makes the economy tick? We've dug into some recent reports to try and make sense of it all for you.
Speaker 2Exactly. We've got info from ABC News and KPRC2 Click to Houston. Abc really zooms in on the home construction side of things and KPRC gives us that wider view, the bigger trade picture.
Speaker 1So our mission here is basically to pull out the key stuff, clarify how these tariffs are actually hitting the housing market, affordability without getting bogged down in jargon or taking political sides on what the reports say.
Speaker 2Just the facts laid out clearly.
Speaker 1Before we jump in, though, a quick word about a great resource. Flowers Associates is helping bring you this deep dive.
Speaker 2Ah, yes.
Speaker 1If you've ever thought about starting your own special needs housing business for adults, which is incredibly rewarding work, flowers and Associates offers Expert consulting really guides you through it all.
Speaker 2They really know their stuff in that area.
Speaker 1Definitely. You can reach them at 901-445-8148 or just visit flowersandassociatesbookingcom. And you know, some listeners might remember Robert Flowers from our previous dives.
Speaker 2Oh yeah, the author.
Speaker 1Exactly Noted author. Titles like the Joy of Helping Others, Creating Passive Income Through Special Needs Housing. His insights have definitely come up before.
Speaker 2A real expert in that field.
Speaker 1OK, so let's get into it. Tariffs and home construction. What's the immediate vibe?
Speaker 2Well, the ABC News report points to something pretty clear Builder confidence is down. Actually, it's at a seven-month low for new single-family homes.
Speaker 1Seven months? Okay, that sounds significant. It's not just a feeling, then.
Speaker 2No, no, it reflects real concerns. Costs are going up. There's this general uncertainty about what's next.
Speaker 1Right, and we heard from that builder, alex Yost in North Carolina. Yeah, alex Yost in North Carolina.
Speaker 2Yeah, in Raleigh.
Speaker 1He's already having to rethink things right where he gets his materials from.
Speaker 2Exactly he mentioned. Like even for light fixtures, you know before it might just be about the look, the quality. Now he's got to think.
Speaker 1OK, where was this made? Are there tariffs? It actually narrows his choices. Wow, so global trade policy is literally affecting which light fixtures go into a house in Raleigh.
Speaker 2Pretty much. And the report said what about 7% of products in new construction are imported.
Speaker 1Yeah, 7%, which, okay, maybe doesn't sound like a huge number on its own.
Speaker 2But wait till you hear the cost impact. They estimate these tariffs could add another $9,200 to the price of a new home $9,000.
Speaker 1Ouch, For a lot of people that's a barrier. That could be the down payment difference.
Speaker 2Almost it's a substantial chunk, absolutely, and it's hitting basic materials. We're talking steel, aluminum, copper, fundamentals, yeah, and appliances too, stuff you absolutely need.
Speaker 1Now hang on. Didn't the report say some things were like exempted lumber and gypsum?
Speaker 2Ah, good point. Yes, canadian lumber and Mexican gypsum were specifically exempted from retaliatory tariffs.
Speaker 1Retaliatory, so like tariffs put in place because another country did something first.
Rising Costs for Homebuyers
Speaker 2Exactly so. There was some strategic thinking there, it seems. And gypsum, just so folks know that's in drywall plaster cement, pretty key stuff.
Speaker 1Okay, so that's some relief, but still lots of other materials. The prices are going up.
Speaker 2Definitely, which brings us to the buyers. How are they feeling about this?
Speaker 1Well, this was interesting in the ABC report. The first time buyers they talked to, they weren't initially super worried about tariffs stopping them from buying the house itself.
Speaker 2Right, that surprised me a little too. The focus seems to be on that sticker price.
Speaker 1But then they started thinking about. You know what makes a house a home.
Speaker 2That's how they put it, the insides, the appliances.
Speaker 1Yeah, Washers, fridges, dishwashers. Suddenly the tariffs on those imported goods, that hit home because it bumps up the total cost of getting set up and messes with that monthly budget.
Speaker 2Exactly, it's the total cost of ownership, not just the purchase price and that realtor, Leonard Windham. He mentioned seeing buyers pushed further out.
Speaker 1Further from the city centers. Yeah, Because those monthly costs are just creeping up.
Speaker 2Which changes, commutes, changes communities. It all connects.
Speaker 1It really does. And beyond just the cost. Now there's this other layer of worry, right about the future.
Speaker 2Yeah, the uncertainty. The ABC report brought up the speculation like what if buyers pull back, If they get nervous about the economy because of all this tariff talk?
Speaker 1Demand drops. And if demand drops, maybe builders slow down construction, which makes the housing shortage even worse than it already is in many places.
Speaker 2Exactly, it's like a potential double hit Higher costs and fewer houses being built.
Speaker 1Man? And what about the builders themselves? Alex Yost mentioned supply chain worries too, didn't he?
Speaker 2He did Really practical stuff, like if he can't get cabinets on time because they're held up Right and every month of delay means extra cost, often for the client who might be paying for temporary housing. It's not just numbers, it affects people's lives directly.
Speaker 1Yeah, that's a really crucial point. Yeah, ok, so that's the construction side feeling the pinch Increased costs, supply chain jitters, uncertainty.
Broader Economic Context
Speaker 2Pretty much sums it up. Now let's maybe zoom out. The KPRC2 report gives us that wider economic context. Ok, shifting gears. Cprc2 report gives us that wider economic context.
Speaker 1OK, shifting gears. So President Trump announced a pause on some tariffs, but this is important, not on China.
Speaker 2Correct. That's a key distinction. The pause didn't cover China. In fact, the report said tariffs on some Chinese goods actually went up.
Speaker 1Right Got it and they had that analyst, mark Hamrick from Bankrate.
Speaker 2Yes, his insights were interesting. He suggested the reason for pulling back on some of the other planned tariffs might have been worries about a potential burgeoning financial crisis.
Speaker 1A crisis, wow. What indicated that?
Speaker 2He pointed to the bond market. You know, when certain bond yields spike, like the 10-year treasury, it can signal investors are getting nervous, maybe foresee economic trouble ahead. That likely got policymakers' attention.
Speaker 1Okay. So even with that partial step back, the tariff situation isn't exactly resolved.
Speaker 2Not at all. Kprc emphasized that significant tariffs are still very much in place those higher China tariffs, potential auto tariffs, auto parts tariffs, even maybe pharmaceuticals down the line.
Speaker 1And they mentioned a number $300 billion worth of import taxes still potentially kicking in.
Speaker 2Yeah, it gives you a sense of the scale. It's huge. We're still looking at baseline a 10% tax increase via tariffs on a lot of goods, plus that 25% on certain Chinese items.
Speaker 1Which ultimately could mean higher prices for us, the consumers.
Speaker 2That's the potential outcome. Yes, across a whole range of products.
Speaker 1The report used Apple as an example, didn't it? Because they rely so much on China?
Speaker 2They did, showed how their stock took a hit from the trade tensions. It illustrates how these big policies ripple through major companies, the stock market, investor confidence.
Speaker 1So the main takeaway there is even pulling back slightly didn't erase the risks.
Speaker 2Pretty much Risks to the financial outlook economic growth, inflation. They're still there, maybe just held off for a bit rather than solved.
Investor Advice and Key Takeaways
Speaker 1And politically. Kprc mentioned the uncertainty around the why right. Is it negotiation? Is it long-term policy?
Speaker 2Hard to tell Exactly. That unpredictability itself is a challenge for businesses trying to plan, for investors trying to gauge risks.
Speaker 1So the market did rally a bit on the news of the pause.
Speaker 2It did, which probably had a lot of people checking their 401ks.
Speaker 1Yeah, probably, and Hamrick gave some advice for investors in that situation.
Speaker 2Pretty standard. Solid advice really For long-term investors don't panic, sell during dips. It's notoriously hard to time the market getting out and getting back in right, stay the course. Basically, if you're near retirement, maybe double check your asset mix. Make sure it fits your timeline and risk tolerance. Younger folks generally write it out. Time is on your side.
Speaker 1Okay, so let's try and wrap this up. Key takeaways for listeners.
Speaker 2Well, first tariffs are definitely adding costs and complexity to building a home. Well, first tariffs are definitely adding costs and complexity to building a home. That likely means higher prices for new houses and maybe more immediately felt for things like appliances.
Speaker 1Right, Even if the initial house price doesn't seem directly hit, for some buyers the total cost of setting up and owning that home goes up.
Speaker 2Exactly. And second, the bigger trade picture is still well, it's murky. Tensions, especially with China, persist. Significant tariffs remain. Potential for more exists.
Speaker 1Which carries ongoing risks for the economy as a whole Consumer prices, growth, all that.
Speaker 2Yeah, so this stuff matters. Whether you're buying a house tomorrow or just trying to understand why things cost what they do, it's all connected.
Speaker 1OK, so here's something to maybe chew on after listening. With all this uncertainty in global trade and how it clearly hits home, what kind of strategies might people, or even businesses, need to think about to navigate future bumps related to tariffs and shaky supply chains?
Speaker 2That's a really good question to ponder. What does resilience look like in this environment?
Speaker 1Definitely food for thought. Thanks for joining us for this deep dive.
