The competition for Central Oregon rental properties is getting fiercer, as available properties dwindle and homes on the rental market consistently see multiple applicants.

That competition means many rental homes cost 20 percent more today than just a year ago.

Former homeowners who lost their properties through foreclosure or short sale are adding to the region’s tenant pool, driving inventory down and prices up, local property management officials say.

The Central Oregon Rental Owners Association last week released its 2012 rental survey. Its findings, compiled over the first quarter of 2012, showed that just 4.4 percent of the more than 5,700 rental units surveyed were vacant over that time, the lowest rate since the real estate market crashed in 2008.

In addition to low vacancy rates, the 2012 survey showed price increases in rental homes over the last year, and slight jumps in apartment rents.

Of the 940 three-bedroom houses surveyed in Bend, for instance, rent averaged $1,231 so far this year. In 2011, rent on a three-bedroom home was $1,012. For a four-bedroom house, average rent jumped from $1,255 in 2011 to $1,489 this year.

Those increases can be attributed to a growing demand for rental houses — a demand that is outpacing apartments for the time being, said Kevin Restine, president of the rental association and general manager of Plus Property Management in Bend.

As foreclosures and short sales push more families out of their homes, many are looking to move into rental houses instead of apartments, because a house is what they’re used to, Restine said.

As a result, demand for rental houses has shot up each of the last few years, and prices have followed.

The rental market “will continue to be driven primarily by the foreclosures” that are still taking their toll on the for-sale market, Restine said. Though the number of default notices in Central Oregon is down notably from 2009 and 2010, “I think we’re going to continue to see people lose their homes, and continue to see people that used to be homeowners become tenants.”

The annual survey covers prices and vacancy rates for apartments, duplexes, triplexes and homes in Bend and other Central Oregon communities.

The whole region’s 4.4 percent vacancy rate is down from 5.2 percent last year.

As recently as 2009, more than 12 percent of Central Oregon’s rental properties were vacant.

Area-specific

Today, rental companies like Austin Property Management say up to twice as many prospective renters are coming through the door than in the years leading up to, and immediately after, the 2008 real estate crash.

Particularly on Bend’s west side, competition for apartments and rental houses is driving prices up, said Stephanie Kramer, co-owner of Austin Property Management.

“It’s area-specific,” Kramer said of price increases. West Bend rentals “are higher in demand than the east side, which is why we haven’t been able to raise (prices) as much on east-side properties.”

Across the board, most types of apartments have gotten a bit more expensive over the past year. A one-bedroom apartment in Bend averaged $549 in the first quarter of 2012, up from $521 last year.

Other units saw increases in the $10- to $30-a-month range.

Competition for apartments is just as tough as for rental homes, said Andee Jessee, co-owner of A Superior Property Management Co. in Bend.

“I would say there’s just more people moving to the area,” despite the recession, Jessee said. Her company is seeing multiple applicants for most of its rental units. When demand is as high as it is, she said, companies can get away with price increases.

In-migration

Kramer with Austin Property Management guessed that 50 percent of the prospective tenants coming through her company’s doors are people considering moving into the area — most of them from California.

A lot of those new residents seem to be looking at rentals instead of purchase properties, she said, adding that the trend could be a case of housing market jitters keeping them from jumping into an investment like buying a home.

“A lot of people who have the money (to buy) are just renting, because they maybe want to check the area out for a year or so,” Kramer said.

Restine with Plus Property Management pointed to a 6 percent vacancy rate as healthy for the local market. Anything significantly higher means property owners aren’t finding qualified applicants.

But when it’s lower, like the current vacancy rate at 4.4 percent, renters can hit the point where they’ll need to rely on new construction to replenish supply.

The low vacancy rate “could motivate people to build,” spurring demand for new construction, he said.