The slowing of home sales following a post-recession real estate resurgence is unlikely to interrupt the positive pace of senior housing.
Despite a 10% decline in home sales from August 2013 through December and lower expectations for the first part of 2014, the impact to senior housing will likely be “minimal,” says the National Investment Center for the Seniors Housing and Care Industry in its February NIC Insider newsletter.
“Despite the slowing in home sales, the impact on seniors housing performance is likely to be minimal,” NIC says. “Absorption has only loosely followed actual existing home sales (unadjusted for seasonality), which suggests existing home sales are not a major correlate of seniors housing fundamentals.”
If the drag on home sales is prolonged, the outlook could be different, NIC says, though the basic factors impacting the market remain strong.
“The data seems to be directionally consistent, so prolonged weakness in home sales could negatively affect absorption, but underlying housing fundamentals still point towards eventual recovery in the home sales market,” NIC says.
Source: NIC, NAR, U.S. Census.
Written by Elizabeth Ecker