Strong demand for needs-based units drove senior living occupancy higher in the first quarter of the year, marking the seventh consecutive quarterly increase since the industry’s pandemic occupancy low in 2021.
That is according to the latest occupancy data from the National Investment Center for Seniors Housing & Care (NIC) and NIC MAP Vision.
Overall senior living occupancy in the markets tracked by NIC hit 83.2% in the first quarter, representing an increase of 0.3% from the previous quarter. With its latest gains, the industry remains four percentage points below its all-time high of 87.2% that was recorded in the first quarter of 2020.
Operators in two top 31 NIC MAP markets, Dallas and San Antonio, have recovered their pre-pandemic occupancy at an average of 84.8% and 84.4%, respectively. On the high end of the occupancy spectrum in those markets was Boston, which logged an average occupancy of 89.1%; and on the low end, Houston with an average occupancy rate of 78.5%.
Positive net absorption and a relatively limited rate of new supply helped the senior living industry boost its occupancy totals in the quarter.
“Big- picture, the demand for senior housing is still there, the fundamentals are positive, construction is still very limited,” NIC Senior Principal Caroline Clapp told Senior Housing News.
While assisted living occupancy rose 0.7% in the quarter, landing at 81.2%; independent living occupancy remained flat at 85.2%. The slower occupancy gain on the IL side could be a factor of recent home sales, which were sluggish in 2022 and only recently started to pick back up. It could also be indicative of a return of more normal seasonal sales cycles, Clapp said.
“When the broader market is uncertain, it might impact the ability to sell one’s home and potential residents could be sitting on the sidelines to wait for a better housing market,” Clapp said. t.
She added: “We think that assisted living will continue to improve as you see the demand continue.”
According to NIC, recent resident rate growth will help offset expenses with the rise in occupancy.
Occupancy gains aren’t the only reason for industry-wide optimism, according to Clapp. Absorption and rent growth also increased by 0.2 percentage points in the first quarter compared with 4Q2022.
One sign that the industry is trending in the right direction is the number of occupied units. While the industry’s occupancy rate continues to recover slowly toward its pre-pandemic all-time high, the number of total occupied units is currently at an all-time high.
“So even though occupancy hasn’t fully recovered, the number of occupied units continues to climb higher for both primary and secondary markets,” Clapp said.
The post Average Senior Living Occupancy Exceeds 83%, Marking Seventh Straight Quarter of Growth appeared first on Senior Housing News.
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