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Senior living (independent living and assisted living, including memory care) continues to see occupancy gains, and the outlook for the near-term is bright given supply and demand conditions, according to intra-quarterly NIC MAP data released Thursday.

The occupancy rate for senior living for the 31 primary markets followed by NIC MAP increased to 84.2% in the July reporting period, up 0.5 percentage points from June. That rate represents a 6.4 percentage point increase from the June 2021 record low of 77.8% and is 2.9 percentage points from reaching the March 2020 pre-pandemic rate of 87.1%, according to a blog post from Omar Zahraoui, principal at the National Investment Center for Seniors Housing & Care.

Occupancy recovery trends

Assisted living properties had an occupancy rate of 82.5% in July, up 0.6 percentage points from June and 2 percentage points below pre-pandemic levels. 

The all-occupancy rate for independent living properties increased by 0.3 percentage points from June, coming in at 85.8% for July, but it remained 3.8 percentage points below March 2020 levels. 

Occupancy for assisted living continued to recover faster than independent living. Assisted living’s recovery rate was more than double that of independent living, increasing 8.6 percentage points compared with independent living’s 4.2 percentage points since March 2021.

“The senior housing market is demonstrating a steady recovery, with demand and occupancy continuing to rise,” Zahraoui wrote. 

Supply and demand measures

NIC Analytics has developed a new measure — the absorption-to-inventory velocity — to serve as an indicator of how effectively the market absorbs or leases the newly supplied units on a net basis.

In the second quarter, assisted living’s AIV ratio was 38:10 for the 31 primary markets. That is, for every 10 new units added, positive absorption of 38 units occurred, reaching an all-time high since NIC MAP Vision began reporting data in 2005. 

Zahraoui said that this rate suggests an ongoing trend of high-needs demand in the senior living markets and that recovery likely will be sustained in the near term, given current supply and demand conditions. 

Inventory of independent living properties for the NIC MAP primary markets increased by 1.2% from July 2022, whereas in assisted living inventory, it increased by 1.3%. 

The occupancy rate for independent living increased or remained stable in 27 of the 31 primary markets in July. For assisted living, occupancy rates increased or remained stable in 28 primary markets in July.