Central Oregon Daily▶️ Apartment vacancy rate rises as hundreds of new rentals become available

▶️ Apartment vacancy rate rises as hundreds of new rentals become available

▶️ Apartment vacancy rate rises as hundreds of new rentals become available

Apartment availability in Deschutes County is at its highest level in a decade.

That means more choices for people looking for places to live and the cost to rent is stabilizing.

Apartment vacancy rates in Deschutes County averaged about 6% the past the 10 years until last year, when hundreds of new units became available, and supply actually got ahead of demand.

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“Vacancy rates have gone up to 8.9% as a result of the last four years of very heavy construction, heavier than we’ve had since the early 2000s,” said Dan Kemp, Vic President and Principal Broker at Compass Commercial. “To put it into perspective, we’ve added 32% which is over 2,100 multi-family units just in the past four years.”

Apartment monthly rental rates have increased about 50% the past 10 years, from $1,100 in 2014 to $1,800 in 2024.

Property managers talk about the rate at which new units are “absorbed” by renters.

Because the demand isn’t keeping up with the sudden increase in supply, the vacancy rate is rising.

Normally in a supply and demand marketplace that would signal a decrease in costs to rent, but don’t hold your breath.

“The cost of land. The cost of construction. Developers can only lower their prices so much before a project doesn’t pencil. With that said, we are seeing more concessions in the market where landlords are competing for those tenants.” 

Kemp said the average rent for an apartment in Deschutes County is around $1,800 a month. That’s a number I confirmed with the managers of the Outlook at Pilot Butte apartments.

“We’ve got about 680 more units in the pipeline. That’s another 10% of our supply that’s coming online in the next couple of years. Some is coming online in 2024. Some in 2026. In 2025, there’s about four quarters where there’s not a lot of new construction that’s going to be delivered, as a result it will allow vacancy rates to catch up a little bit.”

Kemp says apartment vacancy rates will yo-yo between 6 and 9 percent for the next few years as more apartments come online and they are absorbed (rented) by newcomers to the area.

“We’ve got better in-migration than anywhere else in the state. The allure of Central Oregon, the recreational community, that’s not going away. The word is getting out there so this (high vacancy rate) is short-lived. This is a few years. If most multi-family owners have a long-term vision, they are going to be just fine.”

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