The senior housing market is experiencing a “pronounced change in occupancy dynamics,” reflecting “intense” competition between new and existing properties, according to the latest NIC MAP Vision report.
The senior living (independent living and assisted living combined) stabilized occupancy rate for the 31 NIC MAP primary markets increased 0.1 percentage points from April to 84.7%, according to intra-quarterly NIC MAP data. Occupancy increased 4.44 percentage points from its 80.3% pandemic record low in June 2021 but remains 4.7 percentage points below pre-pandemic March 2020 levels of 89.4%.
A blog post from Omar Zahraoui, principal at the National Investment Center for Seniors Housing & Care, indicated that stabilized occupancy in senior living still has a way to go to reach pre-pandemic levels — the all-occupancy rate sits 3.6 percentage points below March 2020 levels.
May data show that the gap between the 84.7% stabilized occupancy rate and the 83.6% all-occupancy rate was at its smallest point since 2014. The narrowing gap, Zahraoui said, indicates intense competition among senior housing properties, particularly those that have opened recently and are still in the lease-up phase.
“These newly opened properties are actively attracting residents and taking a share of the market from stabilized properties, despite higher asking rates in general,” Zahraoui wrote, adding that factors such as design and appearance at new properties could be influencing residents’ choices.
The trend also may explain the overall recovery in occupied units, although occupancy rates remain below pre-pandemic levels, he added.
Occupancy by property type
Assisted living stabilized occupancy rates were up 0.2 percentage points, to 83.1%, from April, sitting at 1.3 percentage points above the 81.8% all-occupancy rate. Assisted living inventory increased by 1.3% in May, the smallest year-over-year inventory gain since NIC MAP Vision began reporting data in 2005.
For assisted living, occupancy increased or remained stable in 25 primary markets. Cincinnati assisted living occupancy (81.3%) saw the largest increase — up 0.9 percentage points in May but still 4.4 percentage points below pre-pandemic levels. San Jose, CA, had the largest decline, falling 1.5 percentage points from April, to 80.9%, and remaining 10.9 percentage points below pre-pandemic levels, the largest gap across the NIC MAP primary markets.
The stabilized occupancy rate for majority independent living properties (86.3%) remained unchanged from February and was 1 percentage point above the 85.3% all-occupancy rate. Independent living inventory increased by 1.7% (5,777 units) from May 2022 levels.
Sixteen of NIC MAP Vision’s 31 primary markets saw independent living stabilized occupancy increase or remain stable compared to April. Detroit’s independent living occupancy (85.8%) experienced the largest increase from April — up 0.7 percentage points but 4.2 percentage points below pre-pandemic levels. The Las Vegas market had the largest decline from April, down 1.5 percentage points in May to 85.3%, sitting 5.7 percentage points below March 2020 levels.
