16 Mar 2020
Story originally published by Sparefoot.com
As self storage professionals know, moving ranks among the biggest drivers of self storage rentals. But what happens to that chunk of business once the relocation rate in the U.S. drops to an all-time low?
In 2018-19, just 9.8 percent of Americans moved, according to data released in November by the U.S. Census Bureau. That's the first time the relocation rate had fallen below 10 percent since the bureau started tracking such data in 1947. As noted by the Brookings Institution, a nonprofit think tank, the U.S. relocation rate has been in a state of "fairly consistent decline" since the 1960s, when the rate hovered around 20 percent.
So, should self storage industry owners and operators be concerned about this trend? Maybe not.
For one thing, the trend could reverse. "I'm still not giving up on the idea that migration's going to tick up a little bit again," demographer William Frey, a senior fellow in the Metropolitan Policy Program at the Brookings Institution, told NPR.
Perhaps more importantly, the moving rate for the entire country doesn't reflect what's happening in specific self storage markets, particularly ones that are experiencing rapid growth.
"The key is always going to be supply versus demand. Paying attention to population trends is important, but the smart, modern, savvy storage investor should look at this trend as one of many. There are much larger threats to the local storage market than fewer people moving."
Anne Ballard, president of marketing, training and developmental services at Atlanta, GA-based Universal Storage Group, and John Manes, CEO of Katy, TX-based Pinnacle Storage Properties, said moving remains a major reason for self storage rentals at their facilities.
Moving "is still the number one reason why people store with us," Manes said.
The lower moving rate reported by the Census Bureau isn't "enough to send me running scared yet," Ballard said. "But, boy, now that I've read those statistics, I'm certainly going to pay attention."
However, smaller markets with little to attract or keep residents — namely jobs — might feel the sting from the lower mobility rate in the U.S., she said. "Don't put money into a declining market where there's no population growth and there's nothing happening," Ballard cautioned. "Make sure you do your homework."
Thumbnail: Photo by Binyamin Mellish from Pexels
