Written by Joe Mendola, joe@nainorwoodgroup.com
Since the election in
November, what has been happening to the real estate market and the self
storage industry? The stock market is fluctuating and artificial interest rates
are beginning to rise for the predetermined growth in the American economy. With
jobs coming back to the states and American economics dynamically rising, we
have to delve into the minds of our buyers and sellers.
Since the election of
President Trump, the 10-Year Treasury Bill has risen 100 basis points in
interest rates and the Prime Rate has risen 50 basis points. The time is
running short to take advantage of the higher property values for real estate.
As the cost of carrying an asset rises, to the price for that asset falls.
President Trump will be a better friend to the buyers than sellers over the
next couple of years.
That being said, the demand
for self storage is still very high. The window for achieving the highest
property values for income producing properties is closing. The good news is
that as interest rates rise, those who would like to put their equity in cash,
will enjoy higher interest rates on their savings than in years past.
So, if you are thinking of
selling in the next 18 months, the time is now before interest rates rise any
further. You can then enjoy a higher savings rate over the next 4 years.
Interest rates should rise to normal rates in a President Trump pro-growth
economy.
Please contact us for
a free opinion of value for your property if you choose to take advantage of
this window of opportunity on our high property values before the window
closes.
"There
has been a paradigm shift in the last five or six years in terms of supply and
demand for self storage and the occupancy has shifted from 85 or 87 percent to
almost 92 to almost 100 percent. When you get that height, you invite new
construction and new development. Millennials have become the bread and butter
of the self storage business, even though much have not purchased homes, but
have the expendable income to purchase such items such as snowmobiles, etc.
that need to be stored safely. New Hampshire is pretty much in equilibrium."
