Senior dwelling demand “surged” within the fourth quarter 2024, pushing the business to the next common occupancy fee and a brand new file variety of occupied items.
Common occupancy charges within the 31 major NIC major markets rose to 87.2% within the fourth quarter of 2024, representing a acquire of 0.7% from a mean fee of 86.5% within the third quarter of the yr, based on the newest occupancy report from the Nationwide Funding Heart for Seniors Housing and Care (NIC). Occupancy in all the major markets registered larger than it did simply earlier than the Covid-19 pandemic in 2020.
Moreover, the whole variety of occupied senior dwelling items reached a file excessive of 618,000 within the fourth quarter of 2024, a rise over the 611,000 occupied senior dwelling items seen within the third quarter of final yr.
A low variety of newly constructed senior dwelling communities and rising demand from the infant boomers led to the quarterly occupancy enhance. There have been fewer than 22,000 items below building within the fourth quarter of 2024, representing the bottom degree of latest building because the first quarter of 2014, based on NIC MAP Imaginative and prescient.
All informed, there have been 8,800 items of latest stock added throughout NIC’s 31 major markets in 2024, which is just barely greater than the whole quantity added in 2023.
If these developments maintain, occupancy charges might exceed 90% by the tip of 2026, an occasion that has solely occurred “a handful of occasions” since NIC MAP Imaginative and prescient started monitoring senior dwelling occupancy information information, based on NIC Senior Principal Caroline Clapp. She added that the senior dwelling business beforehand hit the 90% to 91% common occupancy vary within the mid-2000s.
“We’re nonetheless a number of proportion factors away from the occupancy fee all-time highs,” Clapp mentioned.
The report signifies the highest three performing markets for occupancy remained regular with Boston, Baltimore and Tampa at 91%, 89.9% and 89.8% respectively. The bottom three have been Atlanta, Houston and Las Vegas at 83.9%, 83.5% and 82.9% respectively.
Arick Morton, NIC MAP Imaginative and prescient CEO, mentioned new building offers are struggling to pencil in resulting from risky capital prices and rising improvement prices.
“Before everything, we have to see significant enchancment within the entry to capital for brand spanking new building earlier than we are going to see the needle transfer on improvement exercise, which is sorely wanted to fulfill the rising demand,” Morton mentioned within the launch.
Annual hire development within the fourth quarter of 2024 was 4.1%, a slight lower over 3Q24’s common hire development of 4.2%. Clapp mentioned whereas the year-over-year asking charges are nonetheless above historic norms and hit peaks in 2023, there may be an anticipated decline coming this yr.
“Given the sample throughout the previous six quarters, it’s doubtless that the magnitude of annual hire development will proceed to incrementally decline within the coming quarters,” Clapp mentioned.
