The Trump administration has imposed tariffs that have raised the costs of key construction materials like lumber, steel, and drywall.
Housing experts say the high demand for the building materials and an increase in costs could make an already expensive housing market even pricier.
After devastating wildfires and deadly mudslides, much of California is in a rebuilding phase.
“The effort to rebuild is just starting to kick into high gear, especially if we look at the mudslides and fires in the Santa Barbara area. That’s going to put additional demand on the supply chain for lumber and steel,” said Andrew Hackleman, Executive Director of the Home Builders Association of the Central Coast.
Hackleman estimates prices will continue to rise in the coming years.
“Just since last year, we’ve seen price increases of about 60 percent,” Hackleman added.
Tariffs are just over 20 percent on imported Canadian lumber and 25 percent on imported steel.
The National Association of Home Builders estimates the cost to build a home will increase anywhere from $7,000 to $9,000, something Hackleman says will directly impact the wallets of consumers.
“People have to go in and rebuild neighborhoods. These are not new construction, these are not new neighborhoods, but to replace existing neighborhoods so families can move back in,” says Eric Pinckert, co-owner of Central Coast Realty Group.
He says a labor shortage is also packing a punch.
"Some of these people are booking six months to a year out, so sometimes your only option is to look for another home if you’re in an immediate need for a change,” Pinckert says. "If you’re in demand, you can charge more for your services and that’s the unfortunate side when we have catastrophes that we’ve had in Santa Rosa and Santa Barbara."