Over the last three years the Bend rental market has shifted dramatically from one with an ample supply of rentals and moderate demand to one with a shrinking supply of rental units and a growing demand for those units. Over that time the vacancy rate in Bend went from a reasonable 5.17% to an unbelievable .66% (yes, two thirds of one percent). *
Things really got rolling in 2012 when the economy in Bend started showing signs of life again. So much of the economy here depends on tourism that when people began travelling more and visiting Central Oregon we saw the unemployment rate start to drop noticeably. That up-tick in jobs and an incredibly low mortgage interest rate gave builders some confidence to start finishing developments that had laid dormant since the real estate bubble burst in 2008. Those builders, of course, needed framers, roofers, masons and carpenters who provided even more spark to the local economy.
That spark led even more people to consider moving to Bend. We haven’t seen any official numbers but it seems as if the number of people moving here is the highest it has been since 2005. Preferred Residential just advertised a home for rent and half of the phone calls and emails we received were from people who are moving here or have already moved here but haven’t been able to find a rental. What is interesting about the people moving here is that they aren’t just from the Northwest. We had prospective tenants call from as far away as Tennessee and Georgia. The large number of people moving to Bend is placing a lot of stress on the shrinking inventory of rental homes.
The number of rental units in Bend is shrinking because many owners are selling their homes to take advantage of rising home prices. Last year we suggested that profit taking could be a factor in 2014 and based on our interactions with prospective tenants it sounds like that is happening in spades. We haven’t kept formal records but if I had to bet, I would say probably two thirds of the people we have talked to about rentals this year are looking for a place because their current rental sold. Another indicator of profit taking by investors can be found in showing instructions for homes for sale. Especially for homes under $300,000.
When prospective tenants call us it is easy to differentiate between people who have just started looking and those who have been looking for a long time. Those who have just started looking have no sense of urgency, don’t have any idea of what is on their credit report and ask for showings that fit their schedules. The conversation with those who have been looking for a long time usually goes something like this: “Is the house still available? Good, where do I apply? Just so you know, I have X and Y on my credit report and my income is 2.3 times the monthly rent. Will that be a problem? No, I don’t need to see the house. I can tell that I like it from the pictures.”
Many renters are getting desperate and who can blame them? It is not unusual to meet people who have been searching for a home for months. Many tell us they feel that finding a rental almost has to become their full time job and they keep missing out on houses because they actually do have a full time job. It has even gotten to the point where there is now a group on Facebook called Bend Housing and Rental Relief Support Group.
*Vacancy rates and rent prices are based on the annual surveys of members of the Central Oregon Rental Owners Association.