Coherent synchrotron radiation from an electron storage ring is observed in the THz spectral range when the bunch length is shortened down to the sub-mm-range. With increasing stored current, the bunch becomes longitudinally unstable and modulates the THz emission in the time domain. These micro-instabilities are investigated at the electron storage ring BESSY II by means of cross-correlation of the THz fields from successive bunches. The investigations allow deriving the longitudinal length scale of the micro bunch fluctuations and show that it grows faster than the current-dependent bunch length. Our findings will help to set the limits for the possible time resolution for pump-probe experiments achieved with coherent THz synchrotron radiation from a storage ring.