Senior living occupancy rates increased for the 10th consecutive quarter in the fourth quarter of 2023 and remain on track to return to pre-pandemic levels in the second half of this year, according to NIC MAP market fundamentals data released Thursday.
The senior living occupancy rate (assisted and independent living combined) increased 0.8 percentage points in the fourth quarter of 2023, to 85.1%, according to the data, analyzed by the National Investment Center for Seniors Housing & Care. That rate is up 7.3 percentage points from a pandemic low of 77.8% in the second quarter of 2021, bringing senior lying occupancy within less than two percentage points of the 87.1% pre-pandemic rate in March 2020.
The assisted living occupancy rate improved 0.9 percentage points from the third quarter to 83.4%, whereas the independent living occupancy rate increased 0.8 percentage points, to 86.8%. As a result, the occupancy rate for assisted living was only 1.1 percentage point from the pre-pandemic level, and the occupancy rate for independent living was only 2.8 percentage points from its pre-pandemic level.
The cities of Boston (90.7%), Baltimore (88.6%) and Minneapolis (88.1%) had the highest occupancy rates of the 31 primary markets that NIC MAP Vision watches, whereas Houston (79.3%), Atlanta (81.8%) and Las Vegas (82.1%) had the lowest occupancy rates.
NIC MAP’s 68 secondary markets fared even better, with assisted living occupancy fully recovered and 1.2 percentage points above its pre-pandemic occupancy level of 84.2%.
Demand outpaced supply in both assisted living and independent living properties within the primary markets in the fourth quarter, driving occupancy rates higher.
Higher capital costs and a challenged lending environment, however, continued to weigh on new supply, NIC said. Inventory for the primary markets grew by only 0.4% from the third quarter. Year-over-year inventory growth held steady at 1.4%, among its smallest increases since 2012.
“At this pace, we anticipate occupancy recovery to pre-pandemic levels in the second half of 2024,” NIC Senior Principal Caroline Clapp said in a statement. “If this environment of robust absorption coupled with relatively moderate new inventory continues, owners and operators will need to determine when to jumpstart new construction to meet consumer demand.”
