4 MIN READ
Sep 27, 2025 9:00:00 AM
Not Yet, but its Coming.
Because DXD is constantly bidding self storage construction across the US, we have a in insiders view of where new construction prices are moving. Our bi-annual contractor survey, set to release next Saturday, will show that neither tariffs nor deportations have significantly impacted commercial construction prices so far.
I've discussed the potential effects of deportations on residential construction on a previous blog: Can Builders Stay Ahead of Deportations and Tariffs?
This week, I watched the John Burns Real Estate Consulting webinar highlighting demographic insights.
So far, deportations and tariffs have not affected residential construction costs either.
While highly political and subject to mass speculation, deportations and tariffs are just background noise compared to demand, which is the driving force in the market.
Why did new home construction prices soar in 2021-2022? Extreme pandemic related demand fueled by low interest rates.
Why are new home prices currently stagnant, despite deportations and tariffs? Low demand due to affordability issues brought on by higher interest rates.
Labor Matters Newsletter, Burning Glass Institute. (Date: Feb-25)
Commercial projects rely less on imported materials and undocumented labor, so the impacts of tariffs and demand will be more muted for commercial construction than residential. But, without a doubt, there will be an impact, it’s just not today.
An indication of excess capacity in commercial construction, two markets we are actively developing, Texas and Florida, construction prices have declined from 2022 peaks. The lower demand that drives contractors and subcontractors to be more aggressive will abate, its just a matter of time.
The cure for low prices is low prices.