Actual Number of Units Occupied Almost Back to Pre-Pandemic Levels, According to Latest NIC MAP Vision Data.
ANNAPOLIS (October 6, 2022) – The senior housing occupancy rate increased 1.0 percentage point from 81.2% in the second quarter of 2022 to 82.2% in the third quarter of 2022, according to data from NIC MAP Vision. Occupancy is up 4.3 percentage points as of this quarter from a pandemic low of 77.9% in the second quarter of 2021.
The senior housing occupancy rate increase—the fifth consecutive quarter of increase—is due to a surge in demand which strongly outpaced growth in inventory. Further, the total number of occupied senior housing units within the 31 NIC MAP Primary Markets is just 2,400 units shy of its pre-pandemic all-time high level.
Demand has rebounded more strongly for assisted living than independent living, with another quarter of robust gains pushing the number of occupied assisted living units to their highest level ever in the third quarter across the Primary Markets. Because new inventory has been added during the pandemic, however, the overall assisted living occupancy rate has not yet reached pre-pandemic levels.
“Occupancy continues its rebound, supported by near-record demand that has strengthened through 2022 after the Omicron outbreak earlier in the year,” said Chuck Harry, National Investment Center for Seniors Housing and Care (NIC)’s chief operating officer. “The data this quarter are very promising overall, especially since this count of occupied assisted living units has not been seen since NIC MAP Vision began reporting the data in 2005. Further improvement is needed, however, to get occupancy rates back to their pre-pandemic levels.”
The boost in the overall senior housing occupancy rate was aided by slow inventory growth paired with robust demand. On the inventory side, just 2,300 units were added within the Primary Markets during this quarter, which is the weakest inventory growth since the third quarter of 2013 other than in the first quarter of 2022. Construction starts also continue to be slow given pressures affecting lenders.
“The rise in interest rates being imposed by a more restrictive Federal Reserve monetary policy as well as economic uncertainty has led to a marked slowdown in loan issuance, which suggests we’ll continue to see a relatively low pace of development in the next several months,” said Beth Burnham Mace, NIC’s chief economist. “The slowdown in construction starts will act as a tail wind and support further gains in occupancy.”
Occupancy improved across all property types. Assisted living had the largest quarterly gain. More specifically:
- Assisted living occupancy increased 1.1 percentage point to 79.7%, up 5.6 percentage points from its pandemic low of 74.1% in the second quarter of 2021, but still below its pre-pandemic level of 84.6%.
- Independent living occupancy increased 0.9 percentage point to 84.7%, up 3.0 percentage points from its pandemic low of 81.7% in the second quarter of 2021 and still below its pre-pandemic level of 89.6%.
- Nursing care occupancy increased 0.8 percentage point to 79.3%, up from its pandemic low of 74.0% in the first quarter of 2021, but still below its pre-pandemic level of 86.6%.
Twenty-nine of the 31 NIC MAP Primary Markets saw occupancy increases in the third quarter of 2022. Boston (88.3%), Minneapolis (86.2%), and Portland (85.6%) had the highest senior housing occupancy rates within NIC MAP’s Primary Markets, and Houston (76.8%), Atlanta (78.1%), and Cleveland (79.1%) had the lowest rates.
Asking rental rates for senior housing across NIC MAP’s Primary Markets saw their largest increase since NIC MAP Vision began reporting the data in 2006, by 4.4% year-over-year basis in the third quarter.
A summary of the NIC MAP Market Fundamentals Data, released by NIC MAP Vision, is below. The complimentary version of the Market Fundamentals report will be available at 4:30 p.m. ET on Thursday, October 6.
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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 Twitter, LinkedIn, and Facebook.
About NIC MAP Vision
NIC MAP Vision is a leading provider of comprehensive market data for the seniors housing and care sector. NIC MAP Vision brings together two strong, well-respected, and complimentary teams and platforms – the market-leading NIC MAP® Data Service (NIC MAP) and VisionLTC’s best-in-class market research analysis platform. For more information, visit NIC MAP Vision’s website.