NIC MAP Vision Report Projects Massive Investment Shortage In Senior Housing

By Jim Nelson | June 27, 2024

According to bleak projections in NIC MAP Vision‘s just-released report, Senior Housing Market Outlook, there will not be enough senior housing to keep up with the rising number of seniors. As the 80+ population in America continues its rapid upward trending, by 2030 there will not be enough housing for all of the seniors unless things turn around quickly.

This report comes on the heels of a recent survey published by U.S. News & World Report that, among other things, spotlighted U.S. Census Bureau data that project an increase of 2.2 million 65-and-older adults each year over the next 10 years — a 120 percent increase over the first two decades of this century. That report in U.S. News & World Report also revealed that 95 percent of seniors 65+ plan to age in place — up from 93 percent a year ago.

But as with anything, where there is crisis there is also opportunity because this means that senior housing has a chance to rise to the occasion and create space for all those additional seniors, which could turn out to be highly profitable.

The $275 billion investment shortage indicated in the NIC MAP Vision data suggests a 550,000-unit shortfall in five years, which offers the chance for major growth to those senior housing companies that can make investments in inventory in time to be ready for that aging population.

“There’s a significant generational opportunity for investors in senior housing development and acquisition,” said Arick Morton, NIC MAP Vision’s CEO. “As the demand for senior housing grows, investing in this sector will result in substantial returns and long-term growth.”

Right now, though, the industry is at a critical juncture when it comes to housing for the rapidly growing aging population.

“We’re already seeing the early stages of this incredible demand growth that will continue nonstop for the next 25 years and beyond,” Morton said in a press release. “We simply don’t have enough senior housing inventory in the pipeline, so we must act now to develop senior housing to help meet this demand.”

How bad does it look halfway through 2024 according to this new report from NIC Map Vision?

• To meet the anticipated 2030 demands of the growing senior (80+) population, senior housing development needs to increase at a pace of more than 3.5 times where it is now.
• By next year, the projections tell us, we will fall 50 percent short of needed senior housing.

Again, it’s not all gloomy. As we continue to put the pandemic in our rearview mirror, and even with the labor crisis and capital markets freeze/high interest rates, the senior housing market is ripe for investment. Consider, for instance, that labor costs aren’t rising as quickly as rent is, so operators can begin to see hope when it comes to operating margins. This represents a turnaround from the previous few years, when, on average, expenses were outpacing revenue.

“The senior housing industry has battled through a trifecta of crises,” said Morton. “As we move past the challenges of the pandemic, labor shortages, and high-interest rates affecting capital markets, the senior housing market presents a prime investment opportunity. We see the longer view. The demand is high and the current supply insufficient, making it an ideal time for investment in this sector.”