117,000 completed new homes are sitting unsold right now.

That’s the highest level since July 2009, right after the housing crash.

And it’s killing storage facilities across the country.

But most operators don’t understand this backwards-sounding fact:

How well you run your facility isn’t the biggest factor in your success.

It’s whether people in your market are moving.

Storage doesn’t create its own demand. Housing activity does.

During 2021-2022, low interest rates + tight inventory created a feeding frenzy. People were buying, selling, relocating, and downsizing. Every transaction created storage demand.

Leasing velocity was high. Rental rates soared…

And storage occupancy hit record levels.

Then the Fed jacked rates, and the entire housing market froze.

Now?

Homeowners are staying put because they’re locked into 3% mortgages and can’t afford to buy at 7%.

Home sales collapsed.

And storage demand evaporated overnight.

National rental rates are down 0.4% year-over-year. That doesn’t sound like much until you realize that storage rates had been climbing non-stop for nearly a decade before this.

Here’s the reality, and it might sting:

As long as interest rates keep homeowners frozen in place, storage is going to struggle.

You can optimize pricing. You can run promotions. You can cut costs.

None of it matters if people aren’t moving.

The only thing that saves this sector is Fed rate cuts that unlock the housing market.

So what do smart operators do while they wait?

• They’re stress-testing their facilities assuming current conditions persist for another 12-18 months.

• They’re cutting unnecessary expenses now, before cash flow becomes a crisis.

• They’re positioning to buy distressed assets from operators who overleveraged during the boom and can’t survive the slowdown.

And they’re building relationships with lenders who understand the housing market correlation, because when rates finally drop there’s going to be a mad scramble for capital.

The operators who survive this freeze will be the ones who prepared for it.

The ones who didn’t will be the ones selling distressed assets at bargain basement prices.

Which side are you on?

Here’s to your success,

Cody

P.S. The financing strategies that worked in 2021-2022 are dead. The market has completely changed, and so have the rules for getting deals approved. If you’re still using the old playbook, you’re already behind. Get the updated strategies here →