Asking rates were at near-record highs for senior living communities in the second quarter, according to a new report from NIC MAP Vision.
Data from the recently released second quarter 2023 NIC MAP Vision Seniors Housing Actual Rates Report revealed that year-over-year asking rate growth for the independent living segment was the strongest, at 9.8%, compared with assisted living and memory care. Independent living in-place rates also were up by 9.4% from 2022, and move-in rates were up by 8%.
Those rates were almost the highest rates of growth year over year, except for January 2022, when many rates increased with lease renewals and annual adjustments, according to a blog post from Omar Zahraoui, principal at the National Investment Center for Seniors Housing & Care.
But independent living also had the highest discounts. The June discount was the equivalent of 1.4 months, the highest on record. Compared with asking rates, in-place rates had a 0.6-month annualized equivalent discount, which was on par with the past 11 months.
Assisted living saw asking rates increase to 10.6% in May, the largest year-over-year increase, dropping to 9.7% in June. Move-in rates also were high, at 9.9%, whereas in-place rates held strong at 9.1% in June compared with year-earlier levels.
Memory care saw the fastest pace of growth for year-over year in-place rates, which were up by 9.2% compared with June 2022 levels. Asking rates were up by 8.5%, and move-in rates were up by 8.1%.
In a previous analysis on second-quarter occupancy and inventory changes in continuing care retirement / life plan communities, Zahraoui, writing in a Ziegler newsletter, warned that rate increases could be driving away some prospective residents from senior living communities.
Zahraoui said the NIC MAP data indicated that although providers successfully pushed post-pandemic rate hikes earlier this year to boost occupancy levels, the tactic might be testing the limits of some prospective residents, despite their ability to pay those higher rates.
Pace of move-ins strengthens
The pace of move-ins generally strengthened during the second quarter for all three segments of senior living — independent living, assisted living and memory care.
Move-ins generally have exceeded move-outs for independent living since May, following four months of weaker move-in rates.
Move-ins for assisted living were at 3.4% of inventory in June, averaging 3.4% of inventory since March 2021. This compares with a move-in rate of 1.1% of inventory in April 2020, when assisted living move-ins were at their lowest point.
Ziegler, via Aline Vice President of Research and Analytics Lana Peck, recently reported that the pandemic did not affect the urgency of move-ins into senior living communities. Independent living communities saw the most change in the percentage of residents who moved in within 30 days of inquiry, increasing to 49% this year compared with 43% in 2019. By contrast, assisted living saw little change in the urgency of move-ins, dropping to 56% this year compared with 57% in 2010, whereas memory care saw a bump from 59% in 2019 to 62% this year.
The NIC MAP Vision rates report provides aggregate national data from 300,000 units within more than 2,700 properties operated by 35 to 40 senior living providers. The initiative is meant to offer increased transparency about monthly rates that senior living residents are paying compared with asking rates.