Why Senior Housing Prices May Drop
In Some Markets Rent Concessions are Becoming Common++
The Coming Senior Tidal Wave
Roughly 10,000 Baby Boomers will turn 65 today, and about 10,000 more will cross that threshold every day for the next 12 years according to the Pew Research Center1.
That’s an incredible 300,000 people turning 65 every month over the next decade.
And by 2030, when the great tidal wave of boomers is at its height, the population of those 65 and older is estimated to be around 106.8 million2.
Based on the sheer numbers of aging Baby Boomers, Real Estate developers have been building senior care facilities at a rapid pace3.
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 are not yet ready to move into a senior care facility4.
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 assisted 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 means there is a surplus of senior housing units out there. In some places that surplus exists right now according to the JLL report ++.
And because of this surplus, prices are dropping in select areas as the building of these community’s increases.
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+.
These Great Deals May be Available in your Area
While the demographics favor senior housing, most people only need such services once they are over 80 years old.
So, despite the excitement, Baby Boomers should not have a severe impact on demand for quite some time+.
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.
