Saturday, May 17, 2008
Another Sign of Foreclosure Crisis: Personal Property Auctioned for Unpaid Storage Fees
The New York Times reports on another sign of the foreclosure crisis:
When homes go into foreclosure and the owners leave, many move their possessions, such as furniture, electronic equipment, exercise bikes, lamps, fish tanks, etc., into self-storage units. This is generally hoped to be a temporary situation.
One poignant quote from the report: “Storage has my hopes in it,” said Mr. Martin, who sleeps on a foldout bed in his mother’s guest room. “I don’t tell anyone this, but at least once a week I go over and look at my couch, my refrigerator, my TV stand, my mattress and realize I did have a life, and maybe there’s a way to go back to it.”
However, in some instances, the same economic and financial problems that resulted in defaulting on the mortgage cause people to fall behind on the storage fees. If the storage fees remain unpaid, the storage facility owner will change the lock on the unit and auction off the contents of the storage unit. People buy the contents at very low prices and then sell the items on E-Bay or at yard sales.
There are no statistics measuring this phenomenon. "It is impossible to put precise numbers on the phenomenon, partly because the industry is highly fragmented — the majority of facilities are locally owned — and also because the topic is not one the industry cares to dwell on. But auctioneers who dispose of units in default, as well as the bidders who try to buy their contents, say they see increasing signs of strain. They note that more auctions involve people who appear to have had their homes foreclosed."
The bright side is that times are good for storage companies. "U-Store-It’s stock is up 33 percent this year. Extra Space is up 18 percent. Public Storage is up 18 percent."
When homes go into foreclosure and the owners leave, many move their possessions, such as furniture, electronic equipment, exercise bikes, lamps, fish tanks, etc., into self-storage units. This is generally hoped to be a temporary situation.
One poignant quote from the report: “Storage has my hopes in it,” said Mr. Martin, who sleeps on a foldout bed in his mother’s guest room. “I don’t tell anyone this, but at least once a week I go over and look at my couch, my refrigerator, my TV stand, my mattress and realize I did have a life, and maybe there’s a way to go back to it.”
However, in some instances, the same economic and financial problems that resulted in defaulting on the mortgage cause people to fall behind on the storage fees. If the storage fees remain unpaid, the storage facility owner will change the lock on the unit and auction off the contents of the storage unit. People buy the contents at very low prices and then sell the items on E-Bay or at yard sales.
There are no statistics measuring this phenomenon. "It is impossible to put precise numbers on the phenomenon, partly because the industry is highly fragmented — the majority of facilities are locally owned — and also because the topic is not one the industry cares to dwell on. But auctioneers who dispose of units in default, as well as the bidders who try to buy their contents, say they see increasing signs of strain. They note that more auctions involve people who appear to have had their homes foreclosed."
The bright side is that times are good for storage companies. "U-Store-It’s stock is up 33 percent this year. Extra Space is up 18 percent. Public Storage is up 18 percent."
Stumble It!