A 2025 Outlook
Market Review: 2023-2024 Trends
The residential property sector in Central Oregon has experienced significant transitions over recent years. While 2020-2022 saw dramatic increases in rental rates, 2023 brought an adjustment period as new multi-family units entered the market, increasing supply and softening prices despite rising interest rates and declining residential sales.
Throughout 2024, as predicted, the rental market remained relatively stable, with flat rent growth in most areas. The housing market stayed tight, shifting more potential buyers toward renting. The trend away from Airbnb toward shorter-term rentals (one-three months) continued, alongside growing demand for smaller, single-occupancy units. The expansion of local colleges, including COCC and OSU-Cascades, maintained steady student housing demand throughout the region.
2025 Market Expectations
Looking ahead to 2025, we anticipate that the Central Oregon rental market will enter a phase of cautious growth. With fewer new multi-family developments scheduled to be completed this year compared to previous years, supply constraints are beginning to emerge once again. This tightening supply, combined with persistent demand from those priced out of the purchasing market due to still-elevated interest rates, suggests modest rent increases of 3-5% may return to the regional market.
The focus on location remains paramount, with properties in walkable areas near amenities, outdoor recreation access points, and educational institutions commanding premium rates and lower vacancy periods. The student housing segment will remain particularly robust as local institutions continue expanding their enrollment and program offerings.
Strategic Recommendations for Property Owners
Tenant Retention Remains Critical
The value of responsible tenants cannot be overstated in 2025’s market environment. A reliable tenant who pays on time and communicates property concerns promptly remains more valuable than the incremental income from tenant turnover and higher rates. We continue to recommend prioritizing lease renewals with good tenants, even if current rates are slightly below market potential.
Pet-Friendly Policies with Proper Screening
Central Oregon continues to boast pet ownership rates nearly three times the state average. Property owners can capitalize on this market characteristic by offering pet-friendly properties while implementing comprehensive pet screening protocols. This should include meeting pets in person, verifying veterinary records, and establishing clear guidelines for pet behavior and property maintenance.
Strategic Property Improvements
2025 offers excellent opportunities for enhancing property values through targeted improvements:
- Water conservation systems are increasingly valuable as the region faces ongoing drought concerns
- Energy-efficient upgrades qualify for expanded federal and state incentives
- Smart home technology installations can command premium rents while reducing operational costs
- Heat pump installations and weatherization improvements qualify for significant rebates
- Xeriscaping and native landscaping reduce maintenance costs while appealing to environmentally conscious renters
Conclusion
The 2025 Central Oregon rental market presents a balanced opportunity landscape for property owners. While dramatic growth is not anticipated, the stabilizing market with modest growth potential rewards strategic management approaches. Property owners focusing on tenant quality, targeted improvements, and understanding regional demand factors will be best positioned to maximize returns while protecting their investment value.
