According to recent news, the second quarter of 2012 saw much construction activity in the senior housing and care industry. The National Investment Center for the Seniors Housing & Care Industry’s (NICs) analysis service said that with this increased traction, the occupancy rates have also recovered while the rent growth has seen a rise, when considering year-on-year figures. The news suggests that senior Americans are increasingly opting for elder care services and senior housing as a secure and comfortable environment.
Senior housing inventory growth rate
The yearly senior housing inventory growth rate spiked to 1.3 percent during the second quarter of 2012. This adds to ten basis points over last quarter and 20 more than the same period last year. However, current construction (which forms a part of the existing inventory) was flat at 2.1%. NIC director of research Chuck Harry said that this construction stability points to the beginning of a new phase in the overall development cycle. As compared to the 2.1% absorption rate in 2012s first quarter, the second quarter has witnessed a 2.3% rate of absorption for senior housing properties. In 2011, the rate stood at 1.7%. Harry stated that the speed at which the yearly absorption was being recorded was reflective of the robust demand for senior housing in the country.
Growth in rent and demand for skilled nursing occupancy
There was, however, a decline as far as skilled nursing occupancy was concerned, though this was marginal. The rate stood at 87.9%, which represents a decrease of 30 basis points from last quarter’s numbers. It also reinforces the trend of a marginally falling demand for skilled nursing occupancy that has been observed over the past couple of years.
The yearly growth in inventory for nursing care properties fell 0.3% this quarter. Again, this was in line with the trends, according to NIC. There was a growth in private pay rents – 3.1% – over the same in 2011’s second quarter.
Explaining the demand for Senior Housing
According to NIC, as baby boomers age, the demand for senior housing communities seems to be growing higher, with more expectations in the future. Interest among investors in the same niche also seems to be growing, with assisted and senior living communities being touted as a growing sector. The level of care services provided by veteran senior care providers, such as Carlton Senior Living, has also encouraged seniors. What makes senior living offerings attractive is the fact that residents have a myriad of assistance available should they come to need it. This means, at CSL’s Northern California communities, residents can enjoy a slew of personal services so they remain as independent as possible.