The Seniors Housing Market continues to prepare for the influx of Baby Boomers who will begin searching for Seniors Housing over the next few years. Several trends caused by the increasing number of Boomers have been reported over the years and have steadily increased over the past ten years. The newly released Seniors Housing Research 2018 Report found that 2017 set record highs in a variety of categories studied by researchers.
Trends in Independent Living:
- Increased competition from newer units is slowing rent gains in the majority IL segment, with the average advancing 2.3 percent to $3,106 per month. (Marcus & Millichap, 2018)
- While sales of Independent Living units were down in 2016, 2017 saw a notable recovery as sales transactions jumped to 86%.
- Demand for Independent Living units remains high and the sector has maintained a 90% occupancy rate.
Trends in Assisted Living:
- In 2017, 18,500 Assisted Living units opened within facilities reaching a decade high (Marcus & Millichap, 2018)
- The average price per unit increased by 9% to $167,250.
- The rate of construction for Assisted Living units is significantly above historic norms, William E. Hughes, Senior Vice President of Marcus & Millichap Capital Corporation reports that this trend is projected to continue as so many units are being built in preparation of need.
Trends in Continuing Care Retirement Communities:
- CCRCs entrance fees saw a 5% increase ending 2017 at around $330,000.
- Occupancy rates in CCRCs are the only sector in senior living to see an uptake to 91.2%.
- At the start of 2018, roughly 8,700 units were underway.
Top Ten Senior Housing Construction Markets in America
In 2017, Florida, New York, and Texas accounted for one-quarter of Assisted Living unit sales. Dallas/Fort Worth Texas is in the top ten Seniors Housing Construction Markets in America and are among the highest percentages of average annual growth of their 65+ population at 4.3%.
Tampa Florida also maintains an average annual growth of their 65+ population at 4.3%. Tampa is among the highest percentages of stabilized occupancy in Independent Living, Assisted Living, and Nursing Care units at 88.2%. New York City had the second highest number of units underway at 2,820. Second only to Phoenix, Arizona, which had 23,360 units underway.
A Growing Market
According to the report, “homeownership in the 75 and older age segment has fallen for four consecutive years after peaking at a high of 80 percent in 2012 and 2013, resting at 76.8 percent at the end of 2017.”
New tax laws implementing in 2018 incentivize many in this demographic to sell their homes and seek out senior housings units instead. No doubt smaller, more accessible spaces and an age-friendly focus make senior housing an attractive model for many older adults selling their much larger family homes.
These trends are expected to continue over the next several years. Continued demand for seniors housing mainly Assisted Living units makes the construction and expansion of these units a worthwhile investment for Senior Housing companies. SOURCE: Marcus & Millichap. (2018). Seniors Housing Research – National Report. Marcus & Millichap.