Why Senior Housing Prices May Be Dropping in [geoip_detect2 property=”mostSpecificSubdivision” default=”Your Area”]
In Some Markets Rent Concessions are Becoming Common++
The Coming Senior Tidal Wave
Based on the sheer numbers of aging Baby Boomers, Real Estate developers have been building senior living facilities at a rapid pace1.
But all of this overbuilding has had its consequences:
Greater Supply Than Demand
All of this overbuilding in recent years has increased the supply of units. This increase has started to impact occupancy levels, with the average occupancy for seniors housing (independent living, assisted living and memory care), now below 90% according to the NIC MAP© Data Service++.
Plus, many of the Baby Boomers these facilities are geared to feel they are not yet ready to move into a senior care facility2.
Current Impact of Overbuilding Senior Care Facilities
Another recent report, Senior Housing Market, by JLL said overbuilding pushed average occupancy levels for senior housing down+.
And in markets such as Dallas, Houston, San Antonio, and Las Vegas, average memory care occupancy levels are down to 85% or less++.
The report by JLL went on to say that as building continues, there is a gap where the number of living facilities and senior housing units will continue to be higher than number of seniors living there++. Thus, putting more pressure on prices.
What This Over Supply Means for You
It goes back to the basic principal of Supply vs. Demand. Let’s look at the dictionary statement for Supply and Demand:
“The amount of goods and services that are available for people to buy compared to the amount of goods and services that people want to buy.
If more of a product than the public wants is produced, the law of supply and demand says that less can be charged for the product+++.
More supply means bargains may be had.
Right now, there is a surplus of senior housing units out there according to the JLL report ++.
And because of this surplus, prices are dropping in select areas as the building of these community’s increases and the there is less demand.
You Can Find Deals Around the Country
In the most saturated markets around the country many developers are offering rent concessions to attract tenants, but even despite those efforts, rentals are sluggish in overbuilt areas+.
That is in part fueling these deals on senior living facilities.
If you’re interested in finding senior housing for yourself or an aging parent, start your search here.
