Increased Demand for Senior Living
McKnight’s reports there is in an increase in demand for senior living and care in the third quarter of 2021. Lu Chen, Moody’s economist, recently published a report that announced these findings. In comparison to pre-pandemic averages, vacancy rates are high. However, they fell slightly in the second quarter of 2021 to 16.9% from 17%. This drop came in after constant growth for seven quarters.
Facilities specializing in memory care were 19.9% vacant as vacancy rates decreased by 8.8%. For skilled nursing facilities vacancy rates increased by 6.9% to an average of 16.5% during the second quarter.
Construction of new facilities has slowed down and is not expected to increase in the third and fourth quarters. In the beginning of 2019, the average for new construction was 0.85% but in the second quarter of 2021 it increased only 0.23% nationally. There were 2,500 fewer senior housing units available and only 7,300 coming online. In comparison, in the second quarter of 2020, there were 5,300 units delivered and 15,500 in 2019.
Chen writes “As a result of the weakness in sector fundamentals since the public health crisis, extended slowdown of new facilities coming to market is consistent with the increase in investors’ [sic] caution.”