10 Senior Housing & Senior Living Trends To Watch In 2010

It’s that time of year for our version of top trends to look for in Senior Housing & Living in 2010.  With 2009 in the rear view mirror, our Senior Housing Trends in 2009 was view by over 5,000 people last year and was quoted by a number of students, researchers and politicians both nationally and around the world.  Are we experts?  No, we just follow this stuff everyday and is strictly our opinion.

1.  Finance and Capital Markets Heal Slowly, Carefully and Conservatively

The disconnect between buyers and sellers in both the physical property environment and debt markets will slowly decrease through the year.  However, this gap may increase further as more financial institutions unload repossessed properties where there is either a saturated market or weak demand for product.  Many properties that are currently below stabilization rates are being severely discounted because of their financial performance and their bankers are pushing them to make moves either through refinance or sale.  Bank owned properties and non performing assets should continue to rise as institutions are loathe to spend money to license, operate and maintain facilities but will also face pressure from regulatory bodies to exit from these assets as quickly as possible under the motto “your first loss is you best loss”. Reverse mortgages will continue to gain further exposure as a senior housing choice but housing values and negative stigmatism regarding real or perceived “financial abuse” will limit the growth in 2010. Other interesting topics from the readers include topics such as will quality ratings and metrics have greater significance in the underwriting process for financing and will failed & underperforming hotel/leisure properties be able to be repositioned as ALF or another type of senior housing?

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2.  Construction & Rehabilitation Struggles To Recover In 2010

New construction and construction financing will continue to be difficult to obtain through at least summer of 2010 so new construction projects will be in short supply overall. As communities and providers evaluate their current infrastructure, many will begin to examine the cost of demolishing and rebuilding versus renovating and retrofitting both from a cost standpoint and the ability to deliver more services at a better margin. Others may simply have no choice as some facilities may be on the brink of condemnation or functional obsolescence. In either case, access to capital and financing will hinder and slow the decision process.

3.  Green Goes Mainstream

The term “green” is beginning to fee like “white noise” when it comes to developers and operators marketing their projects. “Green” design in senior housing is being used so much in marketing of projects that we feel that not only is it becoming lost in the sales pitch, it is almost ignored. Maybe there should be a developer/operator to tout how “environmentally decadent” their project is to get some attention? It certainly would get a few people to stop and say, “Huh?”. LEED certification & Energy Star appliances are wonderful things, however what are the tangible benefits?  What about common sense tactics such as retrofitting and winterization? What’s the bottom line effect?  In 2010, if you can’t show me the money, don’t make a fuss about how green you are unless you’re a frog named Kermit and have the skin to prove it.

4.  Economic Development and Employment As Byproduct of Growing Senior Housing & Living Market

With the economy struggling and discussion of job creation circulating around Washington, senior housing & living will be one of the bright spots on the horizon.  Whether its “cash for caulkers” for winterizing and retrofitting homes to new service businesses such as home-care and senior transportation, senior living industry could be a hotbed for economic development. The demographic statistics are undeniable and the heavily segmented and fragmented industry is ripe for small business creation and job growth. This is part of the reason we decided to launch our Senior Housing News Jobs section. 

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5.  Practical Technology Solutions With Tangible Benefits and ROI

Technology is currently gaining momentum as a key part of senior living. New products and services are coming to market quickly using off the shelf technologies enabling quicker speed to market. From monitoring solutions to various gadgets, senior living technology will be one of the hot tech trends with consumers and corporate types. Look for solutions that use open architecture and standard hardware and software with a focus on return on investment.  Look for all solutions to have a mobile internet solution attached to it…senior housing…there’s an app for that.

6.  Service Leans Further Towards Provide Preventive Care Solutions

When it comes to senior housing, look for a more mental and spiritual side of life. Look for preventative care measures to take precedence as focus is placed on the physical, mental and emotional well being of seniors this year.  Yoga anyone?  As access to capital for infrastructure spending is limited, look for senior housing operators to market the “service side” of their businesses more heavily in 2010.

7.  Sales & Marketing of Senior Housing

With the down economy still struggling, look for senior living providers to continue to access traditional media based upon the cheaper prices during the next 12 months. Marketing of senior housing & living will begin to change and become more prevalent in mainstream media as advertisers look towards the demographic trends. As time goes on, those costs will most likely increase as competition increases for those eyeballs and begin to shift to online marketing campaigns. Direct mail marketing companies will no doubt be targeting this demographic based upon data that they have accumulated and what is accessible through information bureaus to target seniors and drive consumers from the traditional print and television mediums on to the web.  Internet advertising for senior living will need to focus on different channels such as brand awareness, internet leads from 3rd party search & lead providers and home grown promotion and advertising. 

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8.  Alternative Senior Housing Options Continue To Grow

These outliers will gain more acceptance so that a broader portion of the population may look at these solutions as more readily accessible options:

    • Small Group Living / Green House Project Design
    • Cooperatives
    • Home Sharing
    • Time Sharing / Fractional Ownership concepts
    • Rural Senior Service Centers (health care)
    • Reverse Mortgages
    • Expatriate Retirement – retirement living in Mexico, Canada and the Caribbean for US resident

9.  Risk Management Becomes Mission Critical (if not already)

As media outlets fan the flames of drama, look for further calls for regulatory oversight and disclosure for products and services from state, regional and national government and quasi-government entities. This increase in regulatory burden and increase in demand will cascade into higher risk management costs, increased litigation risk and higher insurance premiums. Senior living industry participants will place a higher premium on reputation management  in the marketplace and do what they can to protect the risks associated with poor reviews, negative publicity in the local press and disgruntled residents, employees and family members.

10.  What Is Affordable, Senior Housing?

The question of what is affordable senior housing remains an elusive question depending on the financial circumstances of the customer… Is moving into a luxury CCRC more affordable than living in a mutli-million home?  Is downsizing the right move into a smaller single family residence / condo or is moving into a senior apartment/independent living building the lowest cost solution?  Look for demand on the lower end of the socio-economic spectrum to begin to drive low to moderate senior housing projects in 2010 in a trend that will continue to accelerate while the more luxurious, high profile projects have a slower growth trajectory.

Comments, Questions…we’re always at info@seniorhousingnews.com