Senior Housing Occupancy Recovers: Once-Dominant Markets Now Display Lower Occupancy Rates, While Others that Previously Ranked at The Bottom Have Climbed.
The following NIC analysis highlights the ongoing occupancy recovery overall and includes market-level insights from the data.
Key Takeaways:
Senior housing occupancy for the 68 NIC MAP Secondary Markets has fully recovered, buoyed partly by majority assisted living properties’ performance.
Recovery trajectories and timelines continued to be uneven, resulting in notable shifts in occupancy rankings among metropolitan markets.
Market dynamics have evolved recently; once-dominant markets now display lower occupancy rates, while others that previously ranked at the bottom have climbed.
Senior Housing Occupancy by Markets Aggregate. The all-occupancy rate for senior housing for the NIC MAP Primary Markets increased to 84.9% in the October 2023 reporting period, up 0.5 percentage points (pps) from the September 2023 reporting period on a three-month rolling basis, according to intra-quarterly NIC MAP data, released by NIC MAP Vision. From its pandemic record low of 77.8% in June 2021, senior housing all-occupancy increased by 7.1pps and remained about 2pps below pre-pandemic March 2020 levels of 87.1%.
By comparison, the all-occupancy rate for senior housing for the NIC MAP Secondary Markets was up 0.5pps from September 2023 and 8.2pps from its nadir in March 2021. At 86.7%, senior housing occupancy for the Secondary Markets bounced back quicker and had fully recovered, at only 0.1pps below the March 2020 benchmark level.
By majority property type. At 86.5%, the all-occupancy rate for majority independent living (IL) properties for the NIC MAP Primary Markets increased 0.4pps from September 2023 but remained 3.0pps below March 2020 levels. For majority assisted living properties (AL), the all-occupancy rate for the NIC MAP Primary Markets was up 0.7pps to 83.2% from September 2023 and is now 1.4pps below March 2020 levels. Occupancy for AL continued to recover relatively fast compared with IL. From June 2021 – the pandemic-related low – all-occupancy for AL increased by 9.3pps, 4.3pps more than IL (up 5.0pps since June 2021).
In the NIC MAP Secondary Markets, the all-occupancy rate for IL stood at 88.2% in October 2023, having recovered 5.8pps from its pandemic low. It is now just 1.1pps below the March 2020 level. Occupancy for AL properties was 85.1%, about 1pps above the March 2020 level.
Recovery trajectories and timelines continued to be uneven, resulting in notable shifts in occupancy rankings among metropolitan markets.
The past three years have been a period of notable change for the senior housing market. The occupancy rankings tell a story of a market in flux, responding to a complex interplay of economic forces, supply and demand dynamics, and regional attractiveness. The exhibit below compares senior housing occupancy rankings from March 2020 to October 2023 across the 31 NIC MAP Primary Markets.
Notable shifts include San Jose’s fall from the top spot to seventh and Los Angeles’s steep decline from fifth to 22nd place. These suggest a cooling in California’s once red-hot markets. Conversely, Riverside improved from 23rd to sixth, and Dallas from 25th to nineth, suggesting balanced supply and demand dynamics in these markets (relatively higher absorption-to-inventory velocity – AIV ratio).
Houston remained at the bottom of the occupancy pack (31st position) and did not experience the volatility seen in other markets. Meanwhile, Boston, Baltimore, Portland, Minneapolis, and Tampa not only maintained their top 10 status since March 2020 but also ascended to the leading positions by October 2023.
Occupancy recovery and rankings vary notably by majority property type. All-occupancy increased or remained stable in 26 of the 31 Primary Markets for IL in the October 2023 reporting period compared with September 2023. At 85.2%, Tampa occupancy increased by 1.1pps from September 2023. However, at 85.2%, Tampa IL occupancy, ranking 21st among the 31 NIC MAP Primary Markets, is still 6.8pps below March 2020 level, the second largest gap remaining to fully recover, following Los Angeles. Notably, Tampa was ranked seventh in March 2020.
By contrast, Pittsburgh IL occupancy edged up by 0.3pps in October 2023 to 90.8%. Pittsburgh ranked second in the pack, a significant leap from its 18th place ranking in March 2020. Additionally, Pittsburgh IL occupancy has not only recovered the 6.8pps lost during the height of the pandemic but has also surpassed March 2020 levels by 1.6pps.
All-occupancy rose or remained stable in 28 of the 31 Primary Markets for AL in October 2023 compared with September 2023. San Jose, which was the market with highest occupancy levels in March 2020 among the 31 Primary Markets, experienced a significant drop to 27th place by October 2023. At 79.8%, San Jose occupancy remained more than 11pps below its March 2020 level. Conversely, Kansas City occupancy stood at 87.0% in October 2023, 3.5pps above its March 2020 level. This recovery has improved Kansas City’s ranking from 18th in March 2020 to third in October 2023.
In summary, market dynamics have shifted in recent years. Some of the markets that were dominant before the onset of the pandemic now show relatively low occupancy rates, while others that previously ranked at the bottom have climbed considerably.
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