Senior Housing Sees Record Demand in the Second Half of 2021
by Erik Hayden, on Mar 25, 2022 11:00:27 AM
News flash: people get older. In the U.S., there are about 54 million people over the age of 65. By 2030, that number will rise to 74 million. The number of people over 85 is growing even faster. All these folks will need somewhere to live. Many will ultimately find their way to senior housing.
As a result, demand for senior housing hit an all-time high in the second half of 2021 as measured by absorption, according to research from the National Investment Center for Housing & Care (NIC). This was a reversal of recent pandemic-driven trends. Consider:
- Senior housing occupancy levels are up from 78.7% in 2Q 2020 to 81% in 4Q 2021, according to the NIC report.
- In spite of this recent growth, occupancy is still well below the pre-pandemic level of 87.4%.
- About 7.3 million Americans have turned 65 just since the start of the pandemic in March 2020, providing a source of future demand.
- The 85 and over population is expected to grow by 177% to 18.5 million by 2050, according to research from CBRE.
- San Jose is one of the country’s three “strongest” markets with more than one-third of senior housing properties having occupancy rates above 90%.
This is good news for senior housing investors, suggesting that the industry is rapidly recovering and that demand is again picking up, consistent with what would be expected given the broader demographic trends.
It was this kind of demand we anticipated with our Gifford Senior Living project, which will provide 167 units of housing in the urban center of San Jose, with access to downtown and a host of amenities and activities. One of the first senior living projects in downtown in decades, Gifford will include a mix of studios, one bedroom, and two bedroom assisted units, along with memory care studios.
While the pandemic drove demand for senior housing down, it didn’t stop the population from aging. The need is still there and growing. At Urban Catalyst, we’re doing our best to help meet that demand.
See more about our projects and our funds here.
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