Nationwide, senior housing occupancy has reached its lowest level in over eight years.
Occupancy at U.S. seniors housing communities averaged 87.9% in the second quarter of 2018, dropping 0.4 percentage points from the first quarter of 2018 and 0.8 percentage points from the same time last year, according to newly published data from the National Investment Center for Seniors Housing & Care (NIC).
The occupancy rate for assisted living communities, meanwhile, averaged 85.2% nationwide in the second quarter of 2018. This represents a drop of 0.6 percentage points from the first quarter of this year—as well as the lowest level for assisted living occupancy since NIC began analyzing the data in late 2005.
The occupancy rate for independent living communities in the second quarter of 2018 averaged 90.2%, representing a drop of 0.1 percentage points from the previous quarter and a drop of 0.4 percentage points from the second quarter of 2017.
“The seniors housing occupancy rate has trended downward over the past 10 quarters, which is only two quarters short of its 12-quarter downturn during the Great Recession,” NIC Chief of Research & Analytics Chuck Harry said in a press release. “Although annual absorption has averaged a solid 2.4% during this 10-quarter downturn to date, the total number of seniors housing units absorbed amounts to only 63% of the significant and sustained inventory growth during this same period.”
The senior housing annual inventory growth rate in the second quarter of 2018 totaled 3.3%, according to NIC. This represents a 0.2 percentage point jump from the first quarter. Senior housing construction as a share of existing inventory totaled 6.3% in the second quarter of 2018.
Senior housing construction starts within the 31 primary markets tracked by NIC during the second quarter of 2018 preliminarily totaled 4,083 units, which included 2,065 independent living units and 2,018 assisted living units.
“[Assisted living] inventory growth … set a record, with more than 4,400 units coming online,” NIC Chief Economist Beth Burnham Mace said in the press release. “Demand accelerated from the first quarter’s flu-related weak levels, but was not strong enough to offset growth in inventory.”
All the while, the average rate of seniors housing’s annual asking rent growth was 2.7% in the second quarter of this year, which is up 0.3 percentage points from the first quarter.
Written by Mary Kate Nelson