Storage-unit auctions on the rise

HARRISBURG - There's a bumper crop of pickups and trucks in the parking lot at Storage Depot, and their drivers are standing in front of Unit 226, smoking, sipping coffee, hunching their shoulders against the cold, and stamping their feet to stay warm. Whenever they speak, the vapor of their breaths floats from their mouths.

There are perhaps 50 people here, and they cast long shadows in the early-morning sun. Some grip flashlights. Their pockets and purses bulge with padlocks. At precisely 9 a.m., auctioneer B.J. Jennings steps in front of the unit. A breeze rustles her long, blond hair as she brings the wireless microphone to her lips.

"Good morning, everyone. It's a beautiful, crisp day. So let's get the show on the road. Let's play, shall we?" With that, her assistant steps forward, removes the lock from Unit 226, and raises the blue corrugated roll-up door. Those in the crowd surge forward. They crane their necks, stand on tiptoe, remove sunglasses, and drink it all in with thirsty eyes.

"No touching!" Jennings warns. "No opening bags and boxes! You'll be trespassing. This is still somebody else's property."

The unit is piled to the ceiling with plastic trash bags, cardboard boxes, fishing rods, firewood, a fire extinguisher, two Batman lunch boxes, laundry baskets filled with clothing - faded Levi's jeans, torn prom gowns, and born-again Christian Diors.

After five minutes, all have had their fill and Jennings begins in a voice like a bronze gong. "Give me $125, $125, $150, $150, now $175, $175, $200 . . .." The words come in staccato bursts in response to winks, nods, taps, and eyebrow-raisings from the bidders. "Price at $225, $250, $250; $225, bid, $250, $250, $275, $300, now $300, $300, now it's $325, $325, $350, $350; $325 bid, $350, $350, $350, anybody with $350? $350? Sold to 442 for $350."

Bidder No. 442, a craggy-faced man who squints like the Marlboro cowboy, places his own lock on Unit 226 and hastens to rejoin the crowd, which already has moved on to Unit 331. He is in no mood to discuss his purchase. "Let's just say I have my reasons," he says with a sidelong glance. He closes the subject and sits on the lid.

This is a storage-unit foreclosure auction, yet another barometer of the faltering American economy. When people can't pay their mortgages and lose their homes, or are forced to downsize, they entrust their extra belongings to one of the 52,000 cinder-block-and-prefabricated-metal self-storage emporiums that dot the landscape. When they can't afford to pay for the storage, their belongings get sold to the highest bidder, often at a pittance.

It's impossible to get a precise statistical grip on the extent of these sales because the industry is fragmented, and the local owners are loath to discuss it, but anecdotal data confirm it is a surging phenomenon. "Every auctioneer I talk to says storage-unit sales are up considerably over just last year," says Chris Longly, a spokesman for the National Auction Association. "It's a sign of the times. A Denver auctioneer told me he had 900 in 2007, 1,200 in 2008, and in January 2009 alone, he had 200."

A cottage industry has grown around these foreclosures as people seek full-time or supplementary income by reselling the foreclosed units' contents at flea markets, at garage sales, at live auctions, or on eBay. They are bidding as low as $1 in the hopes of finding treasure rather than trash. Their livelihood gets better as the economy gets worse.

It's a profitable but risky endeavor. Storage units are different from ordinary live auctions in several important respects; buyers can't touch and often can't see the goods, and they must buy the entire contents of the unit after only a quick look inside. They can walk into the units if possible, but even then they are not allowed to inspect closed boxes, bags, and other containers.

In other words, the search for the right stuff can result in the wrong stuff - garbage, useless clothing, file cabinets filled with worthless paper, antiquated computers. It's the buyer's responsibility to get rid of the contents and leave the unit broom clean within 48 hours of purchase.

"It's always a gamble," Jennings says as she walks to the next unit. "But most of these people are good gamblers. They keep poker faces. Everything is very low-key. You'll find that they are very reluctant to talk about why they are interested in a particular unit."

For many years, storage-unit auctions have been a supply source for used-furniture dealers. Larry Miller, who owns Emmitsburg Auction Service in Emmitsburg, Md., bought Unit 1196 for $460. Slapping a padlock on the unit, Miller says he ranges around Pennsylvania, Maryland, Delaware, and Virginia, sometimes visiting nine sites in a day. Lately he's been going to about 35 storage auctions per month, and he has noticed that there are more of them and that the volume of furniture in the contents suggests more of them involve home foreclosures.

"I'm almost solely interested in furniture, but it's always a grab bag. Without knowing it, I've bought guns, bags full of garbage, and urns with the ashes of dead people. It's not always bad. Once I got a 1993 Jaguar that was concealed in a unit I paid $900 for. It still runs fine."

Kim and Ron Schissler of Red Lion, Pa., are regulars - she describes them as "frugalites" - "people who love junk, storage-unit freaks, Dumpster divers." Kim has started bidding on a unit piled high with closed boxes. It's impossible to tell what's inside. She stays in the contest for a few minutes before dropping out at $1,350 in response to a questioning arch of Ron's eyebrows.

"That was what we call a box lot," she says. "Closed boxes are where people put the good stuff. That's where the surprises are. You never know what's in those boxes. We've found coin collections, jewelry, and other stuff we sell as yard sales and on eBay. Sometimes we get a great bargain; other times we have to pay more to have the stuff hauled away than we paid for the unit."

Storage-unit regulars tread that fine line between hope and expectation, spurred on by the knowledge that they may find a killer bargain. Urban legends have developed. Perhaps the best-known is the man (or woman or couple) who paid $1 (or $5 or $10) for a bunch of boxes (or bags or mattresses) and then discovered behind them a Harley-Davidson motorcycle (or two Harleys or a Harley with the gas tank signed by Elvis). Other stories involve antique gun collections and safes full of cash.

More believable are the tales of buyers who came up with dead fish, boxes of used hypodermic needles, and buckets of feces.

Jennings is doing auctions at five sites today. As required by state law, she ran a newspaper ad several weeks ago that listed 57 units up for auction at the five sites. That number fell to 34 as delinquent owners paid their leases. Some of them paid this morning.

"The rules are that we never reveal who bought a unit, and we never put the buyer in touch with the previous owner. I get calls from people trying to buy their stuff back, but usually the successful bidders do not want to get involved. We do ask that the buyers return to the storage-unit office any items of a personal nature - family photos, yearbooks - that are of no monetary value."

Storage-auction regulars like Larry Miller have seen buyers approached at auctions by distraught people hoping to buy back some of their possessions or asking for more time to pay. They seldom succeed.

Just now an Amish man is dueling with a guy wearing red earmuffs. "Now $80 . . . (wink) . . . $90 . . . (tap) . . . $100 . . . (wink) . . . $110 . . . (tap) . . . $120 . . . (wink) . . . $130 . . . (tap) . . . $140 . . . (wink) . . . $150 . . . (tap) . . . $160 . . . (wink) . . . $170 (tap) . . . $180 . . . (wink) . . . $190 . . . (tap) . . . $200 . . . (wink) . . . $210 . . . (tap) . . . $220 . . . $220? Looking for $220. Sold to Bidder 442 for $210." Earmuffs wins. The entire battle has lasted less than a minute.

The winning bidder gazes for a moment into the unit with his flashlight, like a spelunker peering into a cave. The beam plays across a child's tricycle and a milk crate filled with books, including a thick Bible.