Tariffs, Recession Fears, and Real Estate: Why Now Is the Time to Think Like an Investor
As global markets react to rising tariffs and economic uncertainty, many people are understandably on edge. JP Morgan recently raised its recession forecast from 40% to 60%, citing concerns tied to escalating trade tensions. But while some see risk, savvy investors are seeing opportunity—especially in real estate.
The Lessons of History: Smoot-Hawley and the 1930s
History often echoes. During the Great Depression, the Smoot-Hawley Tariff Act raised tariffs on over 20,000 imported goods. The result? A deeper economic downturn and significant disruption to global trade. Fast forward to today, and we're seeing similar warning signs: proposed tariffs and early signs of retaliatory trade measures that may spark a new trade war.
But here’s where the narrative shifts.
When Stocks Drop, Real Estate Rises
As uncertainty hits the stock market, wealth often shifts into tangible assets like real estate. High-net-worth individuals and institutional investors are already pivoting, increasing their stake in both single-family and multifamily properties.
Real estate offers stability and utility—two things investors crave during volatility. Unlike stocks, a home serves a dual purpose: it’s both a place to live and a long-term appreciating asset.
Inventory Squeeze = Price Stability
Despite the economic jitters, home prices aren’t expected to fall drastically. In fact, property values may continue to rise for several key reasons:
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Higher construction costs: Tariffs on building materials like lumber and steel could reduce the number of new homes being built.
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Fewer sellers listing homes: Uncertain times tend to make people stay put, which limits inventory even more.
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Stable or sticky mortgage rates: While the Fed may cut rates to ease economic pain, any future drop is expected to be modest—keeping the cost of borrowing favorable, but not dramatically lower.
All of this creates a low-supply, steady-demand environment, which generally pushes prices upward or keeps them stable.
Investors Move Fast—Shouldn’t You?
Most homeowners may hit pause—but investors hit play. That’s the pattern we’re seeing unfold. Smart money is accelerating, not retreating.
Now is the time to adopt an investor mindset, even if you’re not a seasoned property mogul. Those who take action now position themselves to:
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Rent to an expanding tenant pool (as people delay buying).
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Build equity in appreciating assets.
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Generate cash flow while others sit out the storm.
In short: while others wait, you could be winning.
Final Thoughts: Move Opposite the Crowd
Yes, we’re entering a moment of economic flux. Yes, tariffs create pressure points. But rather than panic, consider what the wealthiest investors are doing—they're doubling down on real estate.
By moving strategically now, you may gain access to growing rental demand, appreciating property values, and long-term financial stability.
FAQs
1. Should I wait to buy a house because of a possible recession?
Not necessarily. A recession doesn't guarantee falling home prices—especially if inventory remains tight and demand stays strong.
2. Will tariffs crash the real estate market?
Unlikely. Tariffs may slow construction, tightening supply, which often stabilizes or raises home values rather than collapsing them.
3. What are institutional investors doing right now?
Many are buying up single-family and multifamily properties to hedge against stock market volatility.
4. Is it smart to buy a home to rent out right now?
Yes. Rental demand is rising, and limited inventory is driving up rental prices—creating strong potential for cash flow.
5. How do I protect myself if a recession does happen?
Focus on long-term value. Real estate historically recovers and appreciates over time. Buy wisely and hold strategically.
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Meet Dana & Jeff: The Powerhouse Duo Behind Frontgate Real Estate
Dana Olmes and Jeff Biebuyck are industry leaders and the dynamic founders of the Frontgate Real Estate Team at Compass. Ranked among the top 1% of agents in the country, their expertise, strategic marketing, and negotiation skills have positioned them as trusted advisors to high-net-worth individuals, celebrities, and corporate executives.
Their success is built on:
🏆 A combined 40+ years of experience in luxury real estate
📈 Billions of dollars in closed transactions
🌟 A powerful national network, including experts in sports & entertainment real estate
💡 Innovative marketing strategies and advanced prop-tech integration
Their white-glove service and client-first approach have earned them a stellar reputation, with the majority of their business coming from referrals and repeat clients. Whether buying or selling, Dana and Jeff provide unparalleled expertise in the Calabasas luxury market.
