Senior living occupancy marked eight consecutive quarters of increases in the second quarter, but pre-pandemic levels remain elusive, according to NIC MAP Vision data analyzed by the National Investment Center for Seniors Housing & Care and released Thursday.
The senior living occupancy rate — including independent living and assisted living — for the 31 NIC MAP primary markets increased to 83.7% in the second quarter, up 0.6 percentage points from the first quarter. The rate increased 5.9 percentage points overall from a pandemic low of 77.8% seen in the second quarter of 2021, but it remained 3.4 percentage points below the pre-pandemic level of 87.1% seen in the first quarter of 2020.
“This is the longest period of occupancy rate gains NIC has ever observed, yet occupancy is still below where it was at the start of the pandemic,” Caroline Clapp, NIC’s senior principal of research and analytics, said in a statement.
The number of occupied units increased 0.9% in the second quarter, whereas total units grew by only 0.2%. Compared with year-earlier levels, inventory increased by 1.3%, the smallest amount since 2012.
“Continued solid demand for senior housing, paired with relatively slow growth in inventory, has contributed to the current occupancy recovery,” Clapp said.
Geographically, Boston (89.0%), Baltimore (87.5%) and Portland, OR, (86.9%) had the highest occupancy rates of the 31 primary markets. Houston (78.7%), Cleveland (80.8%) and Atlanta (80.9%) recorded the lowest occupancy rates. Houston was the only primary market with an occupancy rate lower than 80%.
Assisted living recovering faster
Occupancy at assisted living communities is recovering faster than occupancy at independent living communities, according to NIC. The organization said the difference likely is due to the more needs-based nature of assisted living.
The assisted living occupancy rate increased to 82% in the second quarter, up 0.8 percentage points from the 81.2% seen in the previous quarter. This level is 2.5 percentage points below the pre-pandemic level of 84.5% in assisted living.
Meanwhile, the occupancy rate in independent living increased to 85.4% in the second quarter, up 0.3 percentage points from the 85.1% seen in the previous quarter. This level is 4.2 percentage points below the pre-pandemic level of 89.6% in independent living.
Construction at lowest level since 2014
Units under construction amounted to 4.9% of total existing senior living inventory, down 2.8 percentage points from the high of 7.7% recorded in the fourth quarter of 2019. This level of construction is the lowest seen since 2014, according to NIC.
“Higher interest rates and challenges obtaining financing have continued to slow construction starts activity,” NIC Chief Operating Officer Chuck Harry said in a statement. “This bodes well for continued improvement in the occupancy rates over the next couple of years, as new inventory coming online will remain limited.”
