Finding the Next Hot Spot for Senior Living Development

What developers can learn from senior migration patterns

Not all metros are equal when it comes to senior living development. The last 18 months were marked by builder hot spots from Texas, to Arizona and the Twin Cities of St. Paul and Minneapolis in Minnesota.

The speculation continues as builders set sights on new areas of development in 2015, including the return of capital to historic retirement destinations such as Florida.


Knowing where seniors are moving can certainly help providers assess which markets have a clear need for senior housing today and in the future, however, they might be missing out on new opportunities if they don’t consider the migration rates of older adults.

Moves and Migration

Rather than looking simply at population data and the number of adults ages 75 and older in a given metro, recent research indicates that analyzing the net migration rates of this population can give senior living providers, developers, investors and other industry stakeholders deeper insight into where older adults are actually headed across the country.


“Net migration statistics are meaningful metrics to see what seniors actually do and where they decide to move,” says Frank Rockwood, co-founder of Rockwood Pacific, a real estate services firm tightly focused on senior housing and healthcare. “If you’re buying, selling, building or investing in senior housing, these are the things you should think about.”

Researchers from the University of Wisconsin, in a recent paper, calculated net migration as the observed final population at the end of a decade minus the expected population.

The calculation takes into account U.S. Census data by looking at the initial population at the start of a decade and aging it forward in time to the end of the decade, adding in an estimate of the number of births and subtracting an estimated count for the number of deaths throughout the period.

The end result: the net migration rate of older adults (ages 75+) is far from uniform, despite moving less frequently than other adults.

Detecting Patterns

“Most people think older adults tend to move less frequently as they age, however, that is not necessarily true,” says Rockwood, whose firm recently provided its own analysis of the University of Wisconsin report. “We realized that pattern tends to be fairly correlated with migration patterns more broadly.”

For the prior decade (2000-2010), net migration rates of the 75 and older population were bookended by Idaho, which saw a 14% increase during the period, and New York, which posted a -9% rate, respectively. It is worth nothing, however, that these are net migration figures and not overall growth in the 75+ population.

What this means is that in Idaho, for example, the net migration of people moving into the state during the decade was higher than the percentage of those moving out by 14%. On the other hand, with New York the implication is that more people were moving out than moving into the state from 2000-2010, says Rockwood.

Other places such as Austin, Texas, and Portland, Ore. each had high migration rates for adults ages 75 and older at about 21% and 17%, respectively.

On the flip side, places that have been traditionally viewed retirement destinations like Florida’s Fort Lauderdale and Tampa, have experienced an outflow of 75+ seniors in the last decade, with net migration rates of approximately -18% and -11%—despite seeing net migration growth of other persons under age 75 of 6% and 16%, respectively.

“Let’s peel the onion back and see what’s in these forecasts,” says Rockwood. “If you’re thinking about doing a project in Austin, you have the wind at your back when looking at these net migration phenomenon. If you’re interested in Ft. Lauderdale or Tampa, you probably need to adjust your forecast to this effect.”

Surprisingly, reasons for migrating to a different city, state or town isn’t necessarily spurred by the need to find a lower cost destination, though it largely depends on the age of the mover.

In the age 65 and older population, just under 20% cited the need to find better or cheaper housing, while about 16% cited “other family reasons” as the primary reason for moving, according to Rockwood Pacific’s analysis of U.S. Census Bureau data.

Meanwhile, for adults ages 85+, 30% of this population cited health reasons as their primary reason for moving, whereas only 9% said the need to find cheaper housing prompted their decision to relocate.

“A lot of it is about shifting preferences. Things that are appealing to everybody are also appealing to older adults too,” says Rockwood. “Cities are attractive because of all of their urban amenities, and we’re finding that they’re also attractive to older populations.”

Written by Jason Oliva

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