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People who can't afford mortgage discover they can't pay storage, either
By David Streitfeld
New York Times
Published on Sunday, May 11, 2008
ELK GROVE VILLAGE, ILL.: The foreclosure crisis is hitting yet another American locale: the self-storage center.
As they lose their homes, people are turning to these cinderblock and sheet-metal boxes to store their possessions. But some people cannot keep up with their storage bills any better than they could handle their mortgage, and storage companies are auctioning off their property for a pittance.
A cottage industry has developed to buy these lost and abandoned items. The other day, Stephanie Donahou and her son Marcus had only a moment to decide whether to bid on a unit in default. They could see a couch, a sewing machine, a fish tank, a washer and dryer, lots of Christmas wrapping paper, a television and other trappings of daily life.
''This is someone's house,'' Stephanie Donahou said. Her bid, for $160, was the highest. Marcus Donahou was not impressed.
''Ma, you bought a junker,'' he said, rooting through the material. They began to fill their U-Haul. Good material would be auctioned on eBay; middling stuff would go to yard sales.
Blair Auction & Appraisal has been conducting sales at self-storage facilities in the Midwest for more than a decade. ''If a site used to have 10 auctions, these days it has 15 or 20,'' said owner Wayne Blair. At one site in Detroit, he auctioned off the contents of 45 units.
''You tell yourself, 'I'm only going to put my things in for a short time,' '' Blair said. ''Before you know it, you're behind. Then you have to pay penalties and interest. You owe $400 to $500. If you lost your job, you can't come up with that, not if you want to feed your family.''
Investors agree that hard times for homeowners will yield good times for storage firms. U-Store-It's stock is up 33 percent this year. Extra Space is up 18 percent. Public Storage is up 18 percent.
''People might lose their home, but they're not going to lose their things,'' said Charles Ray Wilson of Self Storage Data Services, a research firm.
Yet some evidence suggests that is exactly what is happening. It is impossible to put precise numbers on the phenomenon, partly because the industry is highly fragmented — most facilities are locally owned — and also because the topic is not one the industry cares to dwell on.
ELK GROVE VILLAGE, ILL.: The foreclosure crisis is hitting yet another American locale: the self-storage center.
Get the full article here.
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