Drive around metro Denver and you’ll see senior living developments cropping up like so many weeds in an empty field. Developers have been betting that aging baby boomers will flock to such housing options.
But here’s a news flash: Boomers aren’t ready to be put out to that pasture just yet.
“Many in the generation born between 1946 and 1964 have remained fitter, more independent or stayed closer to families than many developers anticipated,” notes a recent Wall Street Journal article. The result? Senior housing has more vacancies than expected.
Occupancy rates for senior housing nationwide were at 87.9% in the second and third quarter of 2018, notes the Journal. This is the lowest level since 2011, when the rate was 87.5%. Assisted living facilities are also seeing their lowest levels of occupancy since 2016, when such reporting began.
Much of this can be attributed to a glut of such developments: “The supply of senior housing has soared in recent years after many investors struck on the same idea,” notes the Journal. Quoting statistics from the National Investment Center for Seniors Housing & Care, a nonprofit, the newspaper notes that “The market has added 84,727 units since the end of 2012, up from 59,136 units during the six years before…”
Another factor is demographics. Data seems to indicate that people don’t move into senior-living facilities until age 82 or later. The first boomers won’t turn 80 until 2026. In other words, developers may have jumped the gun.
Still, the oversupply won’t remain for long, as boomers are likely to want more help at home as time goes on. “We see that changing dramatically over the next five years,” notes one real-estate developer.