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 NIC Report Says Assisted Living Occupancy Sees Uptick in 3Q, Nursing Care Slight Decline

Latest occupancy data show strong demand for assisted living and independent living housing options in the third quarter of 2019, while nursing centers saw a slight decline in the number of beds being utilized at their facilities, according to the most recent report from the National Investment Center for Seniors Housing & Care (NIC).

Overall, NIC said seniors housing occupancy increased to 88.0 percent in the third quarter of 2019 from its lowest level in eight years (87.7 percent) witnessed during the previous quarter. Nursing care occupancy stood at 86.5 percent in the third quarter compared to 86.7 percent in the second quarter of this year, the report said.

In the assisted living space, NIC said occupancy increased to 85.4 percent in the third quarter, from a previous record low of 85.1 percent for the past three quarters, as relatively robust demand outpaced new inventory growth. The occupancy rate for independent living increased to 90.2 percent in the third quarter, 10 basis points higher than year-earlier levels, but off from levels recorded earlier this year.

“The data suggest strong consumer demand for assisted living and independent living, which supported the overall increase in the national occupancy rate that we’ve experienced,” said Beth Burnham Mace, NIC’s chief economist.

At the same time, construction starts data point to a slowdown in development activity, especially for assisted living, she said. “This should lay the groundwork for improving sector performance, provided there are no significant hiccups that could affect demand, such as drop in consumer confidence, a crash in the stock market, or a broad-based economic recession,” Mace said.

In the broader seniors housing marketplace, NIC said of the 31 metropolitan markets that comprise NIC’s Primary Markets, San Jose (95.5 percent) and Minneapolis (91.3 percent) experienced the highest occupancy rates in the third quarter. On the other end of the scale, Las Vegas (82.3 percent) and Houston (81.5 percent) saw the lowest occupancy rates.

NIC said San Antonio experienced the biggest occupancy uptick from a year ago, rising from 80.2 percent to 84.6 percent. Baltimore saw the largest year-over-year decrease, declining from 92.5 percent to 90.6 percent.

“San Jose retains the distinction of having the highest occupancy rate of any major market in the country, as significant barriers to entry constrain development,” said Chuck Harry, NIC’s head of research and analytics. “Houston, on the other hand, places fewer restrictions on development, which is pressuring occupancy.”

During the third quarter, net new unit demand totaled 4,977 units, the greatest number of new units in any quarter since NIC started reporting the data in 2006.

“At the same time, the quarterly change in the number of units added to existing inventory slowed to 3,832 units, the fewest since mid-2016. The data suggest a possible slowdown in new seniors housing construction,” the report said.

NIC’s Primary Markets saw 17,932 new construction starts in the past four quarters, the fewest such starts since 2014. These construction starts amounted to 2.8 percent of total existing seniors housing inventory, down from 4.0 percent a year ago and 4.6 percent in late 2017.

More information is available at www.nic.org.

 

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