In the past few months, Bend rental-property managers have gone from managing waiting lists to offering discounts in order to get signed leases.
They attribute the slowdown to a surge of newly available apartments.
“We’re starting to get really competitive,” said Andee Jesse, owner of A Superior Property Management Company LLC, which manages 400 single-family houses and several multifamily properties. “We’re dropping prices, and we’re changing up the lease terms.”
That’s a big change from just six months ago, when vacancies were scarce, and rents were rising. While renters now have more options and time to decide on a place, rents are still high across the board. That’s because the brand-new apartments set the standard, and other property owners are following suit, said Dana Bratton, owner of Bratton Appraisal Group.
“People that own existing units, if they’re maintaining them, will enjoy rising rents,” he said.
From Jan. 1, 2016, through Oct. 4, Bend saw 695 new apartments completed, according to the city’s Community Development Department.
The two largest new complexes are Seasons at Farmington Reserve, 228 units in southeast Bend, and Outlook at Pilot Butte, where a building of one-bedroom units opened in June and another building of two-bedroom units opened in August for a total of 205.
A one-bedroom, 450-square-foot apartment at Seasons rents for $765 a month, according to the property’s website. The largest two-bedroom, two-bathroom apartment, 1,288 square feet, costs $1,545 to $1,685 a month.
Outlook is at a similar price level with a loft apartment starting at $1,125 per month and the largest two-bedroom apartment starting at $1,485 per month. Rents are higher for certain units that have luxury finishes, patio access or a view of Pilot Butte, leasing agent Vianca Sanchez said.
While Outlook was under construction, a neighboring apartment complex, Commons at Pilot Butte, was undergoing renovation. Rents for renovated units average $1,200 a month for a one-bedroom unit to $1,500 a month for three bedrooms and two bathrooms, property manager Jessica Mattison said.
Trevor Riley, a 23-year-old landscaper, said he recently saw his rent increase from $1,000 to $1,085 a month after the property was upgraded to hardwood floors. He said he stuck with the apartment because he has plenty of business and he has to keep a roof over his head.
When Riley first leased the two-bedroom, two-bathroom apartment off Reed Market Road at age 18 with his sister as a roommate, rent was $670 a month.
“Within five years, to go from $670 to $1,085 is pretty crazy for the same spot,” he said. “You kind of hope it crashes, not too much, but a little bit.”
Property managers are working harder to lure tenants. Commons at Pilot Butte has 10 vacancies, far more than this time last year, and it’s because of the new competition in town, Mattison said.
“We all used to be waitlist, waitlist, waitlist,” she said. “Now we can more actively rent things.”
If an apartment sits vacant for two weeks, she can offer $500 to $700 off the first full month’s rent.
Jesse at A Superior Property Management said she’s encouraging property owners to allow pets and be more flexible on the length of the lease.
A few properties on A Superior Property Management’s website advertise a “new lower price!!!” Two of the price-reduced rentals are single-family houses, one in Redmond and the other in La Pine. Two others are in Bend: A one-bedroom, one-bathroom house off NW 14th Street is listed at $1,295 a month, while a four-bedroom, three-bathroom house in NorthWest Crossing is listed at $2,500 a month.
“Right now it’s more of a renter’s market than it has been in a long time,” Jesse said.
Melody Luelling, president of the Central Oregon Rental Owners Association, said she’s hearing about high vacancy rates only in the most expensive properties, $1,800 a month or more. Properties renting for $1,500 a month or less are still filling up quickly, Luelling said, but she doesn’t think the market can go much higher.
“We’ve definitely kind of hit a plateau or hit a ceiling on rents,” she said.
Data on Bend’s rental-housing market is thin. The landlord’s association used to conduct an annual survey of member properties but, this year, decided to stop doing it, Luelling said. The latest estimate from the U.S. Census Bureau’s American Community Survey is for 2016, and it pegs Bend’s rental-vacancy rate at 3.1 percent — with a 3.5 percent margin of error.
Whether the market continues to favor renters depends on the pace of construction and how many more people move to Bend. As of Oct. 4, the city had 404 apartments under construction and another 1,263 units in various stages of proposal.
—Reporter: 541-617-7860, email@example.com