In what some are calling "one of the most unaffordable housing markets in the past 30 years," self storage units, especially non-climate controlled (NCC) have had a rough time as stifled home sales have greatly crimped demand, according to Yardi Matrix's National Self Storage Report for December 2023.
Self storage operators rely on a population that moves about the country. But with elevated mortgage rates fewer people are packing up and moving to a new area especially if it means taking on a higher rate. .
Healthy new development in the sector is not helping much, either. Although some developers are delaying their new projects, as they can.
Miami and Chicago are two of the worst-performing markets.
Nationally, street rates remain negative on an annual and sequential basis.
Annual street rate growth in November based on asking rent per square foot fell by 4.2% to $16.57. It was $17.40 in November 2022.
Looking at October to November, national average combined street rates per square foot fell 1%, or 17 cents, to $16.57 with a decline showing up in all the top metros, according to Yardi Matrix.
"Some are optimistic that as new home sales eventually find a bottom and new storage development slows, we will begin seeing improvements in storage occupancy and street rates," according to the report.
In Miami, same-store street rates for combined NCC units decreased 9.1% year-over-year in November, while same-store asking rates for climate-controlled units of the same size fell 7.6% over the past year.
In Chicago, same-store combined street rents fell by 2% month-over-month. Street rates in Chicago "have been feeling the impact of heavy new supply delivered over the past 12 months, much of it in the suburbs," according to the report.
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