Housing Slump Hurts Assisted Living Operators

Late last week the associated press ran an article on how senior housing and assisted living operators were lowering their guidance and forecasts as housing prices continue to fall and sales stagnate. These baby boomers and many retirees are choosing to remain in their homes and stick it out rather than selling for a lesser profit at this time. Seattle-based Emeritus Corp., which provides assisted living and Alzheimers and related dementia care services, late Thursday reported a first-quarter loss that more than doubled to $26 million.

“That said, the supply and demand dynamics for senior housing remain favorable longer-term in our view and we believe that BKD is well-positioned as the largest senior housing operator,” wrote Jonathan Habermann, an analyst at Goldman Sachs, in a note to clients. Another company stated that it believes more and more private pay residents are now moving out of its facilities to be cared for at home by relatives due to the weaker economy, which is spurring layoffs and concerns about family budgets, rather than from a desire by private pay residents to preserve the option of switching to Medicaid in the future.

All things considered, the economy is cyclical and the long term outlook for seniors and housing seems like its a pretty good investment. Slow and steady usually wins the race.