Marcus & Millichap has published its Houston Metro Area Self-Storage midyear 2024 special report.
“The Houston self-storage market shows resilience amid changing economic and demographic conditions, providing steady opportunities for investors,” stated Dave Knobler, senior managing director investments in Marcus & Millichap’s Houston office.
Marcus & Millichap’s Houston Metro Area Self-Storage Midyear 2024 report provides investors with vital insight and analysis on the current state of the Houston self-storage market sector, including:
- Economic Trends: While hiring slowed, the market remains robust with an unemployment rate of 4.3 percent as of July 2024, bolstered by continued corporate migration and job growth in key sectors like education, health services, and construction.
- Demographic Trends: Houston recorded the second-largest net in-migration nationally, despite slowed population growth. The metro's affordable housing has led to a 1.7 percent increase in households over the past year.
- Supply and Demand Trends: After a period of reduced development, new self-storage construction will increase to 2 million square feet in 2024, with most new projects located in the western half of the metro area, continuing the upward trend that began in 2023.
- Vacancy Trends: The addition of new space is expected to push vacancy rates to 7.9 percent, although ongoing household formation will help balance the market.
- Rent Trends: Due to rising supply, average asking rents have softened, falling to $0.93 per square foot, with a year-end projection of $0.91. However, this remains significantly higher than pre-pandemic levels.
“The demand for self-storage continues to reflect Houston's long-term growth potential, despite short-term challenges in rent trends,” added Knobler.
Access Marcus & Millichap’s Midyear 2024 Houston Self-Storage Market Report here.