The NIC Analytics team presented findings during a webinar with NIC MAP clients on April 10 to review key senior housing data trends during the first quarter of 2025. Steve Proffer, Director at Harrison Street, joined the webinar to share an update on the outlook for the year ahead and perspectives from one of the leading investment management firms in senior housing.
Key takeaways included the following:
Takeaway #1: Occupancy Rate Continued Climbing
- The occupancy rate for the 31 NIC MAP Primary Markets rose 0.3 percentage points to 87.4% in the first quarter, driven by net absorption of senior housing units outpacing the number of new units arriving online.
Takeaway #2: Independent Living Occupancy Gains Outpacing Assisted Living in Recent Quarters
- By property type, occupancy rates for independent living have made slightly higher gains in recent quarters than assisted living, which is a reversal of trends in 2022 and 2023.
- In the first quarter, independent living increased to an average occupancy rate of 89.0%, while assisted living increased to 85.8%.
Takeaway #3: Assisted Living Inventory Growth Was Up Slightly, While Independent Living Growth Continued to Edge Downward
- Turning to supply, assisted living inventory growth has ticked up slightly the past two quarters, while independent living inventory growth has declined, which may be driving some of the changes in occupancy rate gains for the two property types.
- Overall, however, inventory growth for both assisted living and independent living remained low historically.
Takeaway #4: Inventory is Shrinking in Five Markets
- Senior housing inventory is shrinking in several markets where property closures or units being converted to other uses outweigh the number of new communities or units replacing them.
- San Antonio, TX has nearly 4% fewer units today than it did three years ago, while inventory has declined by nearly 2% in Riverside, CA, Pittsburgh, PA, and Sacramento, CA.
Takeaway #5: Secondary Market Construction Starts Fell to Historic Lows
- The current trend of low or negative inventory growth is unlikely to reverse in the near term as construction starts in the first quarter continued to decline, with the fewest units breaking ground in the 31 Primary Markets since 2009 during the Global Financial Crisis, and the fewest units ever breaking ground in the Secondary Markets since NIC MAP began tracking this data in 2007.
Takeaway #6: Construction Starts Remain Below Inventory Growth
- The number of new units breaking ground has been less than the number of new units being delivered for four consecutive quarters, a trend that last occurred in 2021 and, before that, in 2009 during the Global Financial Crisis.
