Sustained supply and demand trends could drive senior housing occupancy rate to reach pre-pandemic levels in 2024
The senior housing occupancy rate for the 31 NIC MAP Primary Markets increased 0.8 percentage points from 83.6% in the second quarter of 2023 to 84.4% in the third quarter of 2023, according to data from NIC MAP Vision released by the National Investment Center for Seniors Housing & Care (NIC). The occupancy rate has increased 6.6 percentage points overall from a pandemic low of 77.8% in the second quarter of 2021 but remained 2.7 percentage points below the pre-pandemic level of 87.1% in the first quarter of 2020.
This represents the ninth consecutive quarter of occupancy recovery, driven by record-high rates of demand. Third quarter net absorption was nearly three times new supply, and the total number of occupied units continued to climb to record levels.
“Several consecutive quarters of especially strong demand suggest that the need for the care and housing provided by senior housing is recognized,” said Chuck Harry, NIC’s chief operating officer. “If demand and supply trends continue at their current pace, senior housing occupancy will recover during 2024.”
Demand outpaced supply in both assisted living and independent living properties, but assisted living properties continued to recover faster than independent living. The assisted living occupancy rate within the NIC MAP Primary Markets improved 0.9 percentage points from the prior quarter to 82.6%, while the independent living occupancy rate improved 0.7 percentage points to 86.1%. Occupancy within assisted living properties from NIC MAP Secondary Markets has fully recovered, with the rate 0.1 percentage point above pre-pandemic levels of 84.2%.
Tight financing continues to influence senior housing inventory growth and new construction. Inventory grew by 0.4% or 2,806 units from the prior quarter. Year-over-year inventory growth was 1.3%, near its smallest year-over-year increase since 2012. The number of senior housing units under construction relative to the total existing senior housing inventory was 4.7%, down 3.0 percentage points from the timeseries high of 7.7% recorded in 4Q19 and the lowest since 2014.
Despite the strong demand, there are still 109,358 unoccupied units in the NIC MAP Primary Markets and 32,722 units under construction.
“The story of the past several quarters has been strong demand and slow inventory growth, but a significant number of units remains unoccupied,” said Caroline Clapp, NIC’s senior principal. “Senior housing and care operators are well-positioned to meet the needs of older adults who increasingly need these services.”
Boston (89.8%), Baltimore (88.0%), and Tampa (87.0%) had the highest occupancy rates of the 31 NIC MAP Primary Markets, while Houston (79.4%), Las Vegas (79.7%), and Atlanta (81.0%) recorded the lowest.
A summary of the NIC MAP Market Fundamentals Data, by NIC MAP Vision, is below. The Market Fundamentals report will be available at 4:30 p.m. ET on Thursday, October 5, 2023. 
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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/