The U.S. Census Bureau has forecast a doubling in people 65 years of age and older from 43.6 million in 2012 to 83.7 million in 2050. Consequently, developers are preparing for an increase in demand. However, are they being too optimistic?
Healthcare REITs, which set records early last year, have been the worst-performing part of the property trust market in the past 12 months, according to an article in Bloomberg BusinessWeek.
The National Investment Center for the Seniors Housing & Care Industry (NIC) notes that there currently are more senior-housing units available at any given time since at least the fourth quarter of 2005 and that the demand for units has kept pace with development.
The surge needs to be looked at on a market-by-market basis. In Houston, for example, construction is at its highest since 2005, with 1,591 units being built now.
Healthcare REIT executives believe that too much is being made about the concerns about an oversupply of senior housing.