The following content is taken directly from the Central Oregon Multifamily News, Fall 2017 issue.
The Central Oregon multifamily market continues to be a healthy landlord market. It is still a great time to own residential rental properties.
Data collection is challenging in our market. In past years a local appraiser surveyed the market and was the statistical market expert for many years. They have long since ceased doing those surveys. In more recent years the Central Oregon Rental Owners Association surveyed its members and released a report annually. However, it seemed to generate controversy as critics disputed their data and accused them of being self-serving, thus they ceased surveying and reporting.
Currently, the best source of this data is CoStar, a very expensive subscription service. Compass Commercial is one of the few member organizations in Central Oregon. CoStar data is showing a Bend vacancy rate of approximately 3.9% and Redmond at approximately 5%. Those rates are up from the reported 1-2% vacancies during the last several years.
They are reporting modest rent increases during the last year of about 3% in Redmond and 4% in Bend. This is a substantial slowdown from the double-digit increases experienced over the last few years.
What does this mean for multifamily property owners? The market is reaching a plateau. Rent increases have outpaced incomes substantially, so continued upward pressure is not sustainable. An increasing supply of new construction is slowly impacting the vacancy rate and absorption has been slowing. All in all, a normal and healthy market cycle. And still is a great time to sell, as there is limited inventory for sale and strong buyer demand.
The Central Oregon Multifamily News is published quarterly by brokers Ron Ross, CCIM and Terry O’Neil, CCIM.
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