The Trump administration's tariffs on foreign steel and aluminum are costing the construction industry, as components like walls and windows become more expensive to produce.
Robert Vogelbacher, president of Pennsylvania-based Men of Steel Rebar Fabricators that cuts and shapes rebar for Manhattan apartment buildings, says his prices have grown 35 percent since the spring, in part due to the tariffs. Vogelbacher found that, while he is able to absorb about half of the total costs for a project, some of the remainder could end up padded into the price of a new condo, and as a result, his company stocked up on inventory before prices began to rise, The New York Times reports. Vogelbacher is staving off new orders as much as possible, hoping that the current trade policy will change soon, “It’s a very scary and very weird time,” he said. “I’ve never seen anything like it.”
If costs continue to climb, developers may not have a lot of room to maneuver. In the second quarter of 2018, the median sales price for a new condo in Manhattan fell to $2.67 million, according to Douglas Elliman Real Estate, down 19 percent from the same quarter a year ago. Overall, the number of sales was down, too, according to the company. “If expenses are going up, it’s certainly not encouraging to a developer,” said Kirk Henckels, the vice chairman of Stribling and Associates. “The question about the tariffs is: Can the market bear them?”