Nursing care, assisted living occupancy rates down
Overall seniors housing occupancy rates are up in the second quarter of this year compared with the previous quarter—spurred by the independent living sector, but occupancy rates are down in nursing care and assisted living communities, according to data released today by the National Investment Center for the Seniors Housing & Care Industry (NIC). The occupancy rates in nursing care and assisted living are above their cyclical lows, however.
NIC’s MAP Data and Analysis Service, which tracks more than 13,000 properties on a quarterly basis in the largest metropolitan markets, also released data related to rent growth, annual absorption, inventory growth and construction.
The average occupancy rate for seniors housing properties in the second quarter of this year was 89.9 percent overall, an increase of 0.1 percentage points from the previous quarter and a one percentage point increase from a year earlier. As of the second quarter of this year, occupancy was three percentage points above its cyclical low of 86.9 percent during the first quarter of 2010.
“The improving job market as well as gains in household confidence may be factors supporting demand for seniors housing,” says Beth Mace, NIC’s chief economist. Jobs, she adds, have reached their pre-recession peak levels and the unemployment rate, at 6.1 percent, is now at its lowest level since September 2008.
Occupancy rates. The nursing care occupancy rate was 88.2 percent in the second quarter of this year, a decrease of 0.2 percentage points from the first quarter of 2013.
The occupancy rate for assisted living properties averaged 98 percent during the second quarter of this year, a decrease of 0.1 percentage points when compared with the previous quarter. The occupancy rate of assisted living is 2.4 percentage points above its cyclical low.
The occupancy rate for independent living properties averaged 90.5 percent, an increase of 0.3 percentage points when compared with the previous quarter. The occupancy rate for independent living is now 3.7 percentage points above its cyclical low.
Annual asking rent growth. During the second quarter of this year, the rate of seniors housing annual asking rent growth accelerated to 2 percent from 1.7 percent in the previous quarter and was 0.2 percentage points below its pace one year earlier during the second quarter of last year. Nursing care private pay rents grew 2.7 percent year-over-year this quarter, which is 0.1 percentage points below the pace of the previous quarter.
Annual absorption. Seniors housing annual absorption was 2.7 percent as of the second quarter of this year, compared with 2.3 percent during the first quarter of this year and 1.8 percent during the second quarter of 2013.
Annual inventory growth. In the second quarter of this year, the seniors housing annual inventory growth rate was 1.5 percent, an increase of 0.1 percentage points from the previous quarter. Nursing care annual inventory growth was ‒0.1 percent in the second quarter of this year, continuing the established trend of slightly declining inventory growth. Nursing care annual absorption was 0.7 percent in the second quarter of 2014.
Construction as a share of existing inventory. Current construction as a share of existing inventory for seniors housing was 3.2 percent, which is 0.1 percentage points below that of the previous quarter.
“The overall moderate rate of seniors housing construction was again sustained,” says Chuck Harry, NIC’s managing director and director of research and analytics, “but the resulting rates of inventory growth for independent living and assisted living are quite different. Annual inventory growth for independent living registered only 0.5 percent, while assisted living’s inventory grew by 3.1 percent and marks its fastest rate of growth ever within the NIC MAP time series, which dates back to 2007.”
For market-specific information related to the second quarter of 2014, click here.
Related content: Previous NIC MAP data
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