As we head in to the fourth quarter, all evidence points toward a record self-storage transaction year with likely more than 5x the average number of transactions taking place. But what is motivating all of these transactions – high prices, low capital gains taxes, improving market fundamentals…? These are all market conditions that we have navigated over the last 27 years of doing self-storage investment advisory work and we have never seen comparable transaction volume.
I listened to Federal Reserve Chair Jerome Powell say on Friday that “the tangled supply chains and shortages that have bedeviled the U.S. economy since this summer have gotten worse and will likely keep inflation elevated well into next year.” Additionally, the consumer price index, according to the Fed’s preferred gauge, jumped 4.3% in August from a year earlier, the fastest such increase in three decades. It is really happening; but will we see an extended time of hyperinflation and dare I say rising interest rates over the next few years? For those of you who know me well, I have been predicting rising interest rates for the better part of the last decade and have been wrong. In September, half the Fed’s policymakers supported a rate hike late next year, while half preferred to wait until 2023 or later. With the central bank’s target inflation rate of 2% it is likely that we will see some moves by the central bank by late next year to try and rein in the rapidly growing concern of hyperinflation.
