Senior housing inventory outpaces absorption, NIC reports
Not a whole lot has changed in the senior housing occupancy the past three months.
The average seniors housing properties occupancy rate for the second quarter of 2016 was 89.7 percent, down 0.3 percentage point from the first quarter, according to the latest report from The National Investment Center for Seniors Housing & Care (NIC). The occupancy rate is unchanged year-over-year and has averaged 89.7 the past three years.
“By property type, it is notable that independent living’s annual absorption rate slowed, while its annual rate of inventory growth is accelerating,” says Beth Burnham Mace, chief economist for NIC, in a press release. “The annual absorption and inventory growth rates for assisted living are decelerating, although the pace of activity is still stronger for assisted living. If this pattern continues, it suggests that there will be additional downward pressure on occupancies for independent living in the near future.”
Seniors housing annual absorption was 2.3 percent, down 0.2 percentage point in the first quarter. Seniors housing annual inventory growth was also 2.3 percent, down 0.3 percentage point from the first quarter.
Seniors housing construction starts saw a preliminary total of 3,657 units with 1,890 independent living units and 1,767 assisted living units. On a four-quarter basis, starts totaled 18,022 units, the slowest pace since the fourth quarter of 2014.
Other second quarter 2016 findings include:
- Independent living properties occupancy rates averaged 91 percent, down 0.3 percentage point from the first quarter.
- Assisted living properties occupancy rates averaged 88 percent, down 0.2 percentage point from the first quarter.
- Nursing care occupancy rate was 87.1 percent, down 0.3 percent from the previous quarter.
- The rate of seniors housing’s annual asking rent growth was 3.2 percent, up 0.1 percentage point from last quarter and 0.8 percentage point year-over-year, the fastest growth rate since second quarter of 2008.
- Current construction as a share of existing inventory for seniors housing was 5.6 percent, down 0.1 percentage point from the first quarter.
- The nursing care annual inventory growth rate was zero in the second quarter while annual absorption was down 0.8 percent. Private pay rents for the sector grew 2.8 percent year over year this quarter, the same as the first quarter.
Nicole was Senior Editor at I Advance Senior Care and Long Term Living Magazine 2015-2017. She has a Journalism degree from Kent State University and is finalizing a master’s degree in Information Architecture and Management. She has extensive studies in the digital user experience and in branding online media. She has worked as an editor and writer for various B2B publications, including Business Finance.