Bread, milk, meat and gas prices aren’t the only prices that have gone through the roof lately. Like home and rental prices, the same is true for storage costs.
Self-Storage Costs Up Nearly +30% Y/Y
The average price of a self- storage unit in this country jumped +21.4% from 2020 to 2021, according to the self-storage marketplace SquareFoot. Add this year’s inflation rate of 8.3% at the time of this writing and you’ve got storage units costing close to +30% more now than they cost a year ago.
What’s causing self-storage rent prices to jump nearly +30%? The classic supply and demand equation.
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Reasons Self-Storage Prices Are Up
On the supply side of this equation, building more self-storage facilities declined during and since the pandemic for two reasons: supply chain issues and inflation have made the construction and or/expansion of storage facilities more expensive. For example, the cost of steel surged more than +200% in 2021, if a builder could even find the steel, according to spglobal.com. Construction labor, much harder to find these days, is also much more expensive.
On the demand side of the equation, demand for storage across the country went into overdrive in 2021 due to two primary reasons. One, more-expensive-than-ever price tags for home buying and renting nationwide, (+20% for both home buying and renting) have prevented many from moving into larger homes and/or apartments, according to CoreLogic and ApartmentList. Two, the many effects of the COVID-19 pandemic.
Among pandemic effects making storage space more costly, over 30% of the country’s workforce in 2022 now works remotely at least three days/week, according to VTS, a commercial real estate platform. These workers need to create more permanent office space at home by converting homes and storing home furniture to make way for home office space. Boat and RV sales spiked in 2021 and these boats and RVs need to be stored. Record numbers of workers left their jobs during The Great Resignation which in turn required changes in living situations.
Prices by Storage Unit Size
Take a look at nationwide comparative prices by unit size during 2021. You’ll note the increased cost uptick for large units because of unparalleled demand to store RVs and boats.
Unit Size Ave. Storage Prices/Month $/sq. ft Y/Y Change
5×5 $55.45/month $2.22 +25.4%
5×10 $78.94 $1.49 +27.5%
10×10 $119.84 $1.20 +27.1%
10×15 $154.45 $1.02 +24.3%
10×20 $171.21 $0.85 +24.8%
10×30 $246.85 $0.82 +34.35%
*StorageCafe.com.
Now add 2022’S +8.5% inflation on top of these prices…you get the point.
Self-Storage Market Factors Affecting Costs
Just as for-sale houses and rental costs vary by location, self-storage costs vary by cities, zip codes, rural and suburban areas and even within the exact same market. There is no one-and-done for self-storage costs.
Self-storage costs are also affected by amenities that may be offered by the facility such as:
- Climate controlled units
- Video cameras and monitoring for security purposes
- Seasonality – typically people pay more from May – September because these are the months most people move to new locations
- On-site managers
- 24-hour access to your storage unit
- Insurance coverage for your stored belongings
What Your Clients Can Do to Cut Self-Storage Costs.
Before your clients store their goods, suggest to them that they go through everything to determine what they need and what can or cannot fit into their residence. Suggest they declutter, sell what they can sell, consign what they can consign and donate the rest.
Also, if your clients are teachers, students, veterans, etc. they may be entitled to a discounted rate. Earnestly suggest that your moving/storing clients READ the FINE PRINT of the CONTRACT.
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Thanks to CoreLogic, Realtor.com, ApartmentList, spglobal, VTS and StorageCafe.
