In the last year there has been so much buzz in Central Oregon, particularly Bend; about the low vacancy rate in the rental housing market. The vacancy has been quoted as low as 1%. Realistically, with turn times between tenants that number is probably closer to 3%. So may people ask why has the rental market seemingly all of the sudden taken such a huge turn. There are the obvious reasons, like many former homeowners returning to the rental pool after the real estate foreclosure crisis and the in-migration rate in Central Oregon is growing again. There is another factor that I think is having a huge impact on the market that is not being considered in explaining the numbers.
Bend is once again becoming a vacation destination for many, and as a result we are seeing what could be termed as a “boom” in the vacation rental market. There is increasing demand for these types of accommodations nationwide and specifically in Bend. As a result, many current investment owners and investment buyers are converting their long-term rentals to vacation rentals; as such, reducing the inventory of long-term rentals from the rental market. This has ultimately resulted in a drastic reduction of rental inventory available; thereby driving market rents up, in some cases, drastically and tightening up the vacancy rate in the market.
With growing regional and national awareness of Central Oregon as a vacation destination, I don’t see the trend of vacation rentals slowing in the near future. In addition, Oregon State University plans to open the Cascades Branch campus in the Fall of 2015 with the expected total enrollment to close to 5,000 students and hundreds of staff. These two factors coupled with the limited inventory of rental housing lead me to believe that the rental market in the region will not slow anytime soon.