SpareFoot Quarterly Trends Report

Our last storage trends quarterly report found that trends in self-storage reflect the overall condition of the economy. Our analysis determined that more people were moving to states with lower unemployment rates, which in turn affected self-storage numbers in those states. This quarter’s report reflects the increasing prevalence of apartment rentals in 2012.By the end of this year, the United States could very well be known as a nation of renters; fewer people are purchasing homes and instead turning to leasing. According to Reis Inc., the national apartment vacancy rate fell to 4.7% in the second quarter, the lowest since 2001. This means demand for apartments is astronomically high, which also allows landlords to raise their rents. Have you followed suit in raising your storage rent over the past few years? Self-storage trends support this data— four states where average apartment rent shows increase (California, New Jersey, Massachusetts and Colorado) also ranked in the top 20 highest average price of a 5x5 storage unit. D.C., Hawaii, New York and Rhode Island were the most expensive, coming in at above $60 on average. Between 2011 and 2012, change in employment was greatest in southwest-central states (2.4%) compared to those in the northeast (1.0%).This could account for current moving trends, with moves from California (10-15% unemployment) to Texas (well-below national unemployment average) coming in first and from New York to Florida coming in second. Our assessment of top storage markets by city mirrors this phenomenon; southern states generally outperformed northern states for storage bookings from Q2 to Q3. States like Florida, Texas, Arizona, Alabama and South Carolina saw a significant increase in bookings, while New Jersey saw the most amount of decreased bookings. As the housing market tries to heal itself and realtors begin encouraging people to buy again, the large number of home renters could slow and apartment rental rates may ultimately return from their ridiculous high. One thing’s for sure, though: Self-storage will continue to flourish as long as people continue to move, and it looks like they'll be doing a lot of it.