Independent living gains lead as senior housing occupancy continues to approach prior peak.
ANNAPOLIS (July 11, 2024) – The senior housing occupancy rate for the 31 NIC MAP Primary Markets reached 85.9% in the second quarter of 2024, an increase of 0.5 percentage points from the first quarter of 2024, according to data released by NIC MAP Vision and analyzed by the National Investment Center for Seniors Housing & Care (NIC).
The second quarter of 2024 represents the 12th consecutive quarter of occupancy gains, with a 0.7 percentage point increase in independent living occupancy and a 0.5 percentage point increase in assisted living occupancy from the first quarter. The larger gain in independent living occupancy over assisted living, quarter-over-quarter, signifies a change in pattern from prior quarters which saw higher assisted living occupancy growth. However, at 84.3%, assisted living occupancy is only 0.1 percentage points from its prior peak of 84.4%. At 87.6%, independent living occupancy is 2.0 percentage points from its prior peak.
Consumer demand remained strong, with occupied senior housing units reaching a new record number of 606,968 units, nearly 6,200 units above first quarter 2024 and a 4.4% increase in occupied units from the second quarter of 2023. Inventory growth in the second quarter of 2024 was just over 2,600 new units, a modest 1.5% growth rate year-over-year, significantly lower than the 4.4% growth in occupied units.
Senior housing construction remained depressed in the second quarter, with the fewest senior housing units under construction since third quarter 2014, and the fewest construction starts since the second quarter of 2009 – the nadir of the Global Financial Crisis. Less than 900 new senior housing construction starts were recorded in the second quarter of 2024, although starts are often restated upwards as new projects are captured in the data. Access to capital, cost of capital, and construction costs remain significant headwinds to senior housing development.
“I think we will continue to see developers exercise caution until capital becomes more affordable and accessible. We are hopeful that anticipated rate cuts this year will start to trigger more growth,” said Lisa McCracken, NIC’s Head of Research & Analytics.
“If you are able to access the needed capital and bring forth new developments in the current environment, you may be well positioned to capture future expected demand as the first wave of Baby Boomers turns age 80 in just over a year,” said Arick Morton, CEO of NIC MAP Vision.
Boston (90.6%), Tampa (88.8%), and Baltimore (88.8%) had the highest occupancy rates of the NIC MAP Primary Markets in the second quarter, while Houston (80.9%), Las Vegas (81.1%), and Miami (82.6%) recorded the lowest. Boston was the first Primary Market to reach an occupancy rate above 90%.
A summary of the NIC MAP Market Fundamentals Data, released by NIC MAP Vision, is below. The Market Fundamentals report will be available beginning at 4:30 p.m. ET on Thursday, July 11, 2024.
About the National Investment Center for Seniors Housing & Care The National Investment Center for Seniors Housing & Care (NIC), a 501(c)(3) organization, works to enable access and choice by providing data, analytics, and connections that bring together investors and providers. The organization delivers the most trusted, objective, and timely insights and implications derived from its analytics, which benefit from NIC’s affiliation with NIC MAP Vision, the leading provider of comprehensive market data for senior housing and skilled nursing properties. NIC events, which include the industry’s premiere conferences, provide sector stakeholders with opportunities to convene, network, and drive thought-leadership through high-quality educational programming. For more information, visit NIC’s website and follow NIC on LinkedIn and Facebook.
About NIC MAP Vision NIC MAP Vision maximizes access, choice, and quality in senior housing by providing data, analytics, and services to industry stakeholders and partners. We are the only intelligence provider exclusively dedicated to senior housing. As the industry’s gold standard for market analytics data, we are trusted by the largest government agencies, 18 of the 20 largest senior housing operators, and most of the largest investors and owners. Every day, thousands of industry professionals use our data platform and proprietary tools to make smarter decisions about where to grow, how to grow, and how to bring a strategy to life. For more information, visit https://www.nicmapvision.com/