As the baby boomer demand wave crests, the senior living industry is projected to need many more units in some of the country’s biggest cities, including Dallas, Minneapolis and Seattle.
That is according to a report by Integra Realty Resources (IRR), published this week. The report is based on information from Claritas and the NIC MAP Vision database.
According to the report, senior living companies in Dallas will need to add nearly 4,900 units by 2028 to keep up with demand in that city. Operators in Minneapolis will need to add 2,700 units, while companies in Seattle must add 2,300 units to keep up with demand between now and 2028, according to the report.
The estimate was calculated using penetration rates and target market demographics to estimate total demand.
The report’s authors based their demand estimates on projections assuming a 93% market occupancy. They also included projected unit growth in each market, including the current number of units under construction.
Markets along the West and East coasts are expected generally to see a rise in the 75+ population in the coming 5 years, while many markets in the Midwest and South are expected to see a decline in that population, according to the report.
The number of adults in the U.S. who are both over 75 years of age and who earn an annual median income of $50,000 is expected to grow more than 20% in the next five years going from more than 6.5 million U.S. such householders in 2023 to more than 7.8 million by 2028. And the number of seniors with a median annual income of $75,000 is projected to grow even faster at nearly 28% by 2028.
According to data from NIC MAP Vision the average cost of about $45,000 per year for independent living, $67,000 per year for assisted living and about $95,000 per year for memory care.
“The $75,000+ demographic may become more important in determining seniors housing demand as inflation pushes rents higher and as newer facilities are constructed that will likely compete toward the higher end of the market,” the report’s authors wrote. “However, based on our analysis, the demographic with the highest correlation to seniors housing demand is the 75+ age demographic with annual incomes of $50,000 and higher.”