Assisted living occupancy is continuing to fall nationwide, according to data released Wednesday by the National Investment Center for Seniors Housing & Care (NIC).
The average occupancy rate for assisted living properties across the country fell to 86.5% in the second quarter of 2017. That’s 0.7 percentage points lower than the average occupancy rate in the first quarter of 2017, and 1.4 percentage points lower than the average occupancy rate recorded a year earlier.
The second quarter’s average assisted living occupancy rate is also tied for the lowest ever, which occurred in the second quarter of 2009, according to NIC.
Less-than-stellar absorption patterns may be to blame for this downward trend in assisted living occupancy, according to NIC Chief Economist Beth Burnham Mace.
“We continue to see strong absorption, but it’s not quite strong enough,” Mace told Senior Housing News. “So, to some degree demand is strong, it’s just not strong enough.”
The senior housing annual absorption rate totaled 3% as of the second quarter of 2017—and it grew at its quickest pace since NIC started reporting the data in 2006.
The second-quarter 2017 absorption rate was also 0.2 percentage points higher than the absorption rate recorded in the first quarter of 2017, and 0.6 percentage points higher than absorption rate recorded during the second quarter of 2016.
Latest Senior Housing News Research
Independent living occupancy didn’t fare so well this past quarter, either.
The average occupancy rate for independent living properties nationwide dropped to 90.6% in the second quarter of 2017, which is 0.3 percentage points lower than the average occupancy rate during the first quarter of 2017, and 0.4 percentage points lower than the average occupancy rate during the second quarter of 2016.
“The softening occupancies for both assisted living and independent living is the result of their inventory growth, or unit completions, surpassing their relatively healthy annual rates of absorption of units, including the record pace of absorption for assisted living,” NIC Chief of Research & Analytics Chuck Harry said in a press release. “The record rate of annual absorption for assisted living properties of 4.3% still fell well short of its record annual inventory growth of 5.9%. For independent living properties, those annual rates, respectively, were 2.0% and 2.5%.”
Concurrently, senior housing construction starts within NIC’s 31 primary markets during the second quarter of 2017 preliminarily totaled 4,172 units, which included 2,275 assisted living units and 1,897 independent living units.
The occupancy rate for senior housing properties in general, meanwhile, averaged 88.8% in the second quarter of 2017, due to net additions to inventory outpacing unit absorption.
Written by Mary Kate Nelson