Natalie has had her real estate license for a week, and she’s already figured it out:

I’ve been listening to the podcast Morning Brew Daily as a way to stay up to date on current events without having to read too many doomsday headlines. Happy to say it’s working!

A big topic lately for MBD and many news sources is the recent tariffs. There’s lots of talk about how it’ll affect prices on groceries, alcohol, cars, gas, etc., but how will it affect housing?

As another way to stay more educated, I subscribed to Bill McBride’s substack, a source for many of Jim’s blog posts. In this recent one, he talks about how the recent policies, mainly related to tariffs and immigration, will affect housing:

A few impacts:

• Tariffs will lead to higher costs. I spoke to a contractor last week who hasn’t seen any price increases yet, but he said he had received “warning letters” from key suppliers about likely price increases. The uncertainty around tariffs also makes it more difficult to bid projects.
• Less immigration will lead to less household formation. This suggests less demand for housing, especially for rentals.
• An immigration crackdown would lead to fewer workers in construction. This would push up costs for construction. This would also lead to more rental vacancies.
• This suggests higher costs for construction and less demand for housing.

That last part of the final sentence seemed crazy to me since I often hear about how there is a nationwide shortage of homes for sale and rent. So less demand?! That seems like a solution to our problem, right?

But upon thinking about it more, I think there’s just a massive shortage for attractive housing in desirable areas. And living in LA and working in San Diego real estate, I tend to be focused on some of the most desirable areas in the country.

I was just in the rental market looking for an apartment in West LA. My first day touring, I saw seven apartments in two hours and the options were rough. Most places were old, outdated, and/or dark, plus lacked the desirable add-ons: parking, outdoor space, updated appliances, ample storage, etc. (In LA, I would argue parking is a necessity, but to each their own.) Regardless, of those seven apartments, I finished the day thinking I could probably be happy in only two of them, alright in two others, and miserable living in the rest.

I toured these apartments about 3 weeks ago and almost all are still listed for lease. So my question remains, is there an actual shortage for housing? Or is Bill right and demand is starting to decrease?

Maybe there is sufficient housing in our areas but property upkeep and updating is getting too expensive so sellers/landlords can’t afford to make their listings attractive? And if they can afford to, they’re charging exorbitant prices because we’re in desirable areas and people want to live happily here.

I don’t have all the answers, but some food for thought!

And in case you’re wondering, my boyfriend and I signed the lease for one of the two apartments I said I’d be happy in and got the keys on Saturday – moving in this week!