The strong California economy and thriving job market has lured millions in recent years to move to the Golden State, while a rising high cost of living has many fleeing. For self storage, this has resulted in a rise in rates over recent years.
Investors looking for self storage opportunities in California rely on accurate and detailed data to understand the fluctuations of the market. Knowing and understanding the pricing dynamics and volatility of the market should be part of every investor’s due diligence, especially in markets where the cost of bad decisions come at a higher price.
In the above, we look at the year-over-year trends throughout the last four years in the top ten California MSAs. The data shows a steady increase in average rates across all MSAs and unit types (with a minor exception for smaller units, 5x5 non-climate controlled, in the San Jose, San Diego and Bakersfield MSAs). The Riverside, Sacramento, Oxnard and Stoctock MSAs have all seen a rate increase of 20% or more across all units since 2015, while seven of the top 10 MSAs have seen an increase in rates of 5% or higher in at least one unit type in the last year.
As these regions continue to grow economically and in population, the demand for self storage continues to surge. Those looking to invest in these markets, or any market, should do so with full knowledge of the market’s competitors, pricing volatility, current and historical trends, demographics and any other data which will provide a full picture of the market.