What Will Happen to the Corvallis Rental Market Because of the Coronavirus? – Ryan’s Investor Corner April 2020

As we continue seeing the effects of the first true quarantine of our lives due to COVID-19, one question keeps popping up over and over with local investors – what will happen in the local rental markets? I wish I had a crystal ball and could give you the answer and direct advice, but there are still too many variables and unknowns. Let’s discuss a few of the positive and negative forces currently working on the Corvallis rental market.

Positive Forces

1. Fall rent renewals are strong. One of the largest property managers in the area reported to me that they are excited at the number of renewals coming in this month.
2. Housing shortages continue in the community, state and nationally.
3. During the Great Recession we had a large increase in student count at OSU, helping keep home prices and rents stable.
4. Other than the housing-led Great Recession, recent national and statewide recessions have not caused widespread home value declines.
5. The Mid-Willamette area has a high portion of the industry in more stable income sources with higher education & healthcare.
6. Most economists see this recession as “short-term.” They are mostly fighting over whether it will be a V-shaped, U-shaped, checkmark-shaped or a bathtub-shaped recovery.

Negative Forces

1. New construction apartment complexes in Corvallis with 1,100 new bedrooms will become available this Fall. Last academic year saw 448 rooms completed at the Domain. There are 258 units (mix of 1, 2 & 3 bedrooms) going in just at the edge of town at The Boulevard in Philomath. City of Corvallis – University Area Housing
2. OSU officials were estimating their enrollment to be static over the next 5 years, pre-pandemic. Video Source Link
3. Some are questioning “will students return to campus” at the national level. Forbes Article, NY Times Article
   • What will be the impact on international students (11% of OSU enrollment)?
   • Will some students choose university options closer to home?
   • Will some students decide the online format works well for them after being forced into taking online courses this Spring, and not return to Corvallis?

My Take

If you were thinking about selling your investment home in the next couple years, I believe that now is the time to do it. We are still seeing multiple offers at lower and moderate price points around Corvallis and Albany. The market is currently strong and it may not be worth the stress of the unknown. Be ready for a softer rental market this Summer and Fall. Advertise early and often, make your rent competitive to others homes on the market. I believe this is a great time for first time buyers and those considering downsizing to be on the lookout to purchase homes between Harrison & Grant. Those neighborhoods may swing back to primarily owner-occupied in the next few years. If you currently own rentals in that area, decide on whether holding it is a long-term or short-term goal. Please let me know if you have any thoughts, feedback or questions at ryanlong@kw.com.