The senior housing occupancy rate rose to 83.7 percent in the second quarter of 2023, according to a report from the National Investment Center for Seniors Housing & Care. That increase marked a 0.6 percentage point gain from the first quarter of 2023. According to data from NIC MAP Vision, analyzed by the NIC, the second quarter increase marked eight consecutive quarters of increases for senior housing occupancy rates. It is the longest streak of occupancy rate gains ever observed by NIC.
“Barring a severe recession, which most economists are not currently predicting, this pattern of positive demand outpacing limited new supply is likely to continue in the near term,” Caroline Clapp, NIC CFA and senior principal, research and analytics, told Multi-Housing News. “If this trend does continue, it is likely that occupancy rates would also continue their recovery.”
Remaining lower
Despite consistent increases in occupancy levels, senior housing occupancy remains lower than it had been pre-pandemic. Occupancy gained 5.9 percentage points overall from a pandemic-era low of 77.8 percent in the second quarter of 2021. But it remained 3.4 percentage points below the pre-pandemic level of 87.1, registered in first quarter 2020.
The number of occupied units grew 0.9 percent in the second quarter. At the same time, total senior housing units grew by only 0.2 percent. Vis-à-vis year-earlier levels, inventory grew by 1.3 percent, the smallest gain in 11 years.
As a percentage of total existing senior housing inventory, units under construction represented 4.9 percent. That level was down 2.8 percentage points from the high of 7.7 percent witnessed in Q4 2019 and is the lowest level of construction since 2014.
Occupancy levels are rebounding more quickly at assisted living than in independent living properties, NIC experts reported. The assisted living occupancy rate increased to 82 percent in Q2, an increase of 0.8 percentage points from the 81.2 percent in the previous quarter, but 2.5 percentage points below its pre-COVID level of 84.5 percent.
Highest rates
Meantime, the independent living occupancy rate rose to 85.4 percent in the second quarter, up 0.3 percentage points from 85.1 in the previous quarter. That is 4.2 percentage points below the pre-COVID level of 89.6 percent. Boston, Baltimore and Portland, Ore., had the highest occupancy rates of 31 metro markets studied by NIC MAP Primary Markets. Houston, Cleveland and Atlanta notched the lowest. Two months ago, Braemar Partners made news when announcing it would build new luxury senior housing in New Jersey.
