ANNAPOLIS, MD.—The senior housing occupancy rate in the United States decreased to 87.8 percent in the second quarter of 2019, from 87.9 percent a year ago. This represents the lowest occupancy level since the second quarter of 2011, according to new data from the National Investment Center for Seniors Housing & Care (NIC).
Of the 31 metropolitan markets that comprise NIC’s Primary Markets, San Jose, Calif. (95.7%) and Portland, Ore. (91.6%) experienced the highest occupancy rates in the second quarter. Las Vegas (82.3%) and Houston (81.1%) recorded the lowest occupancy rates.
San Antonio experienced the largest occupancy increase from a year ago, rising from 78.5 percent to 82.9 percent. Los Angeles saw the largest year-over-year decrease, falling from 90.1 percent to 87.9 percent.
“Nationally, senior housing occupancy trends softened slightly again, but local economic and housing market performance is driving the more substantial losses and gains we’re seeing in certain areas,” said Chuck Harry, NIC’s head of research and analytics. “Zoning, regulations and shifting demographics may also contribute to this variation.”
NIC data suggest a possible slowdown, even after any likely subsequent upward revisions, in new senior housing construction. NIC’s 31 Primary Markets saw 19,113 new construction starts in the last four quarters, the fewest new starts since 2014. These construction starts amounted to 3.0 percent of total existing senior housing inventory, down from 4.3 percent a year ago.
“We are seeing a clear downward trend occurring in construction starts nationwide for new senior housing units, especially for assisted living. Industry leaders should keep an eye on this data going forward to make informed decisions on new developments and other potential investments,” said Beth Burnham Mace, NIC’s chief economist.
Additional data from NIC include assisted living occupancy reaching a record low in the second quarter of 2019, averaging 85.1 percent, while independent living occupancy also declined, dropping to 90.2 percent from 90.5 percent last quarter.
Senior housing occupancy recorded its most recent high of 90.2 percent in the fourth quarter of 2014.