MAY 30, 2025 AT 1:30 PM | By Emily Landes
A federal court recently put a block on President Donald Trump’s tariff
plan, but residential agents say that uncertainty around the tariffs, and
the subsequent roiling of the financial markets has already had its
impact, spooking some segments of the buyer pool during the usually
hot spring sales season.
“We were all saying, ‘We’re back, baby!’ and then the tariffs happened
and I think that certainly dampened some of that sentiment,” said
Arrian Binnings, a Christie’s Sereno agent in San Francisco and Marin.
In January, the West Coast condo market was “as hot as can be,” said
Polaris Pacific’s founder, Paul Zeger. With rumors of the tariffs on the
horizon, by February there was a “distinct change” where sales began
to dramatically decline. New pending deals in February and March
were 50 percent of what they were the year before across the
marketing and sales firm’s entire portfolio of 20 projects in several
Western states. A recovery started somewhat in May, with tours and
loan applications both up and “liquid” buyers taking advantage of
developers’ priced-to-sell mentality, he said.
But there is still a tariff-connected cloud hanging over the market.
“Many homebuyers are still slow to purchase due to the daily
uncertainty that the tariff debacle is creating in the financial markets,”
he said.
Seattle, Arizona and Hawaii condominium sales have been steadier
than the Bay Area because people in those markets aren’t as reliant
on stock sales to purchase their home, he said. Initial Public Offering
activity is also “on ice” while the market see-saws, which is also
holding some buyers back from cashing out their equity, he added.
In addition to the luxury market, the elimination of staffing at Fannie
Mae and volatility of interest rates is also impacting entry-level buyers,
Zeger said, since loan approvals are taking longer and people’s
interest rates could go up while they are waiting.
“If all of a sudden your loan goes from 6 percent to 6.5 percent, some
people can fall out of qualifying at that point,” he said. “I think the
entry level is being hit for the ability to purchase and the luxury
buyers are being hit just because they don’t need to purchase, so
they don’t.”
A “competing force”
While there’s some slowing impact from the tariffs, there’s also a
“competing force” that kept the market moving this spring and that is
the pent up demand from the last two low-volume years, Binnings
said. The Five Ds — “death, divorce, debt, diapers and diamonds” — is
acting as a “forcing function” and is “actually overpowering the wet
blanket that was thrown on buyer sentiment.”
Gino Canori, president of Related California, said that condo sales at
The Avery have been moving forward without any discernable
impacts from the tariff uncertainty throughout the spring, and the
luxury apartment segment of the East Cut project is filling up as well.
He added that he was okay with some short-term volatility, as long as
the economic gains that the tariffs are meant to create come through
for the country and its urban cores over the long term.
“I don’t know if this plan is going to work or not,” he told The Real
Deal at an event last month dedicated to the city’s recovery. “We’ll
have to see.”
Continued low inventory is also making some buyers move ahead,
hoping for less competition if they bid during the turmoil, said
Christie’s Sereno agent Nicholas French, who primarily works in
Silicon Valley. Plus, some buyers cashed out “in the nick of time,” he
said, putting them in a great position to bid without keeping one eye
on the Nasdaq.
Even before the tariff and market uncertainties, the later spring
season is already a time when the “euphoria of the early season starts
waning.” The impacts on pricing could have been much worse if they
came earlier in the competitive season, he added.
“We might see a little bit of a blip, but in the big scheme of things, this
is not a critical moment in our market’s time,” he said.
During the stock market’s downward spiral he reminded tech clients
“freaking out” over their portfolios’ values that they’re still up
considerably over the long term. One recent client who works at
Apple was calmed when he reminded her that, even with the recent
dip, her stock was still up 200 percent over the last five years.
With the stock market in a better place today than it was even a
month ago, there has been an uptick in interest, said Compass agent
Nina Hatvany, who works primarily in San Francisco. In April she
heard buyers at open houses fretting over the crisis in the financial
markets, but now the local luxury market seems “to have recovered a
bit after the tariffs and the stock market gyrations,” she said, citing
one of her recent San Francisco listings that went for $8 million “really
quickly and over asking.”
“But it’s spotty,” she added. “There are houses lingering that one
would have thought would have sold by now and then others being
snapped up.”
Being remodeled and turnkey helps, she said, especially given the
likely impact of tariffs, assuming they do go through, on construction
costs.
Of course, on the highest end, buyers don’t need to sell stocks at all,
said Nathalie de Saint Andrieu of Christie’s Sereno, who repped the
buyers in a $32.1 million Atherton buy in April.
“Once you start going over the $20 million mark, there’s enough cash
sitting somewhere,” she said.