Hunter Reynolds, Senior Associate at Matthews™, recently received a featured article in Modern Storage Media. In the article, Reynolds gives insights on how a decrease in homebuying has led to a slowdown in self-storage demand, how housing declines have impacted self-storage REITS, a forward outlook, and a focus on self-storage performance in the Southeast.

 

Below are some of the main takeaways from Reynolds’ article.

 

Highlights:

• Housing Boom Shifts to Slowdown: Although the self-storage and housing markets recorded top activity throughout 2021-2022, this performance has begun to decrease. Lower interest rates pushed people to buy homes, leading to a competitive buying market, but now that interest rates are higher there are less housing sales. The drop was also reflected in the self-storage segment, with a decrease in demand leading to lower street rates.
• Self-Storage REIT Performance: The latest earning calls from self-storage REITs highlight the challenging market activity, which includes the need for new tenant rates to be 35-40% lower than existing tenants to sustain historical occupancy levels. National Storage Affiliates recorded one of the largest decreases in performance with same-store occupancy at 83.6% at the end of Q1 2025. This marks a 240-basis-point decrease from Q1 2024, when same-story occupancy was at 85.8%.
• Southeast Focus: While performance is varied across the region, the Southeast recorded an increase in sales volume year-over-year. Total volume for the Southeast was $389.6 million at the end of Q1 2025, with operators employing different strategies to attract new tenants.
• Looking Ahead: As interest rates remain high, the self-storage sector will likely continue to feel pressure. Yet, with the market recording an increase in rental activity, developers will have more clarity when making investment decisions.

 

Read the full article here to see the full impacts the housing market has on self-storage.