The real estate industry has survived recessions, financial crises, pandemic shutdowns and rate spikes, Darryl Davis writes. A commitment to being genuinely useful to the people you serve, regardless of what the market is doing, is the reason.
Friday morning, the Supreme Court of the United States delivered a 6-3 ruling that struck down the majority of President Trump’s sweeping tariffs, declaring them an illegal overreach of executive authority.
Simultaneously, the Bureau of Economic Analysis released Q4 2025 GDP figures showing the economy grew at a sluggish 1.4 percent annualized rate — a dramatic collapse from the 4.4 percent pace in the third quarter — while the Federal Reserve’s preferred inflation gauge, the PCE index, crept up to 3 percent.
Three seismic events. One morning. And real estate professionals who aren’t paying attention are about to get caught flat-footed.
Think of it this way: When a major earthquake hits, it’s not just the initial tremor that causes damage. It’s the aftershocks that keep coming, sometimes for months, that crack the foundations of things people thought were stable. That’s where we are today.
The tariff ruling — and why it may not mean what you think
The Supreme Court’s decision invalidates tariffs imposed under the International Emergency Economic Powers Act (IEEPA), covering reciprocal tariffs on dozens of countries and levies tied to trade relationships with Canada, China and Mexico. The government has already collected upward of $130 billion under these now-illegal authorities, and businesses are already demanding refunds.
Here’s where I need to pump the brakes as your analyst and offer a word of caution: Do not assume this ruling changes everything overnight. The Trump administration has a well-documented pattern of resisting, delaying or working around court decisions it disagrees with. Officials have already signaled they will use other statutory trade authorities to reimpose many of these same tariffs through different legal mechanisms, such as executive order.
There is also a real question of whether refunds will be processed efficiently — or processed at all — given the administration’s track record of treating unfavorable court outcomes as obstacles to navigate rather than orders to follow.
As I always say, plan for the worst and hope for the best. It is simply too early to know the full ripple effect this ruling will have on real estate. The legal fallout alone — with countries, industries and individual businesses all lining up to pursue refund claims — could generate years of litigation and continued uncertainty.
That uncertainty may ultimately prove more damaging to builder confidence and consumer sentiment than the tariffs themselves were.
If materials costs do eventually normalize as trade relationships stabilize, new construction pricing could get some relief. Lumber from Canada, steel and aluminum from multiple trading partners, appliances with Chinese-sourced components — all of these drove up building costs for over a year. But don’t hold your breath waiting for that relief to show up at a price per square foot anytime soon.
GDP: What 1.4% actually tells us
The Q4 2025 GDP figure of 1.4 percent was not just a miss — it was a stunning one. Economists had projected growth of around 3 percent. Much of the blame falls on the 43-day government shutdown late last year, which disrupted federal spending and furloughed thousands of workers. Consumer spending, which accounts for roughly two-thirds of the U.S. economy, slowed to its weakest pace in over a year.
For real estate, consumer confidence is everything. When people feel economically uncertain, they don’t make major financial decisions. They don’t buy homes. They don’t relocate. They don’t upsize. They sit still and wait to see which way the wind blows, as we saw in January homes sales slid on a monthly and annual basis.
Sellers who were counting on motivated buyers in spring 2026 need to recalibrate their expectations. The buyer who was “almost ready” six months ago may have just pulled back another six months.
Inflation: The problem that won’t quit
Core PCE inflation came in at 3 percent, above the Federal Reserve’s 2 percent target and above expectations. The Fed has been reluctant to cut interest rates aggressively in this environment, which means mortgage rates remain stubbornly elevated. The 30-year fixed mortgage has hovered well above 6 percent for months, and today’s data makes it even less likely the Fed will move quickly.
Here’s the painful reality agents need to communicate clearly to clients: Higher inflation, slower GDP growth and elevated mortgage rates existing simultaneously is the economic scenario most damaging to real estate transaction volume. It suppresses both supply and demand at the same time.
Sellers won’t list because they can’t afford to trade their locked-in low rate for a new one. Buyers can’t afford to buy because the monthly payment math simply doesn’t work. The market doesn’t freeze because people stop wanting homes — it freezes because the conditions make transacting nearly impossible.
What real estate professionals must do right now
First, become the most economically informed person your clients know. In times of uncertainty, people gravitate toward trusted advisors who can cut through noise and provide clarity. If you’re not reading the headlines, not understanding what they mean for your local market and not proactively communicating that insight to your sphere — someone else will fill that void.
Second, stop waiting for the market to rescue you. The agents who thrive in disrupted markets are the ones who build systems, not the ones who rely on favorable conditions. This is the moment to sharpen your listing presentations, strengthen your buyer consultation process and deepen your relationships with mortgage professionals who can help clients find creative financing solutions.
Third, help your clients find the opportunity inside the uncertainty. Yes, conditions are challenging. But challenging conditions also mean less competition for buyers who are ready to move and sellers who are appropriately priced. The buyers in the market today are serious. The deals available to motivated sellers are real.
The real estate industry has survived recessions, financial crises, pandemic shutdowns and rate spikes. What separates the professionals who endure from those who disappear is always the same thing: a commitment to being genuinely useful to the people they serve, regardless of what the market is doing.
Today’s economic earthquake will pass. The aftershocks — legal, political and financial — will continue for a while, and exactly how long is anyone’s guess. Your job is to be the steady hand your clients need when the ground is still shaking.
