The senior housing occupancy rate for the 31 NIC MAP Primary Markets increased 0.8 percentage points from 83.6% in the second quarter of 2023 to 84.4% in the third quarter of 2023, according to data from NIC MAP Vision released by the National Investment Center for Seniors Housing & Care (NIC). The occupancy rate has increased 6.6 percentage points overall from a pandemic low of 77.8% in the second quarter of 2021 but remained 2.7 percentage points below the pre-pandemic level of 87.1% in the first quarter of 2020.

This represents the ninth consecutive quarter of occupancy recovery, driven by record-high rates of demand. Third quarter net absorption was nearly three times new supply, and the total number of occupied units continued to climb to record levels.

“Several consecutive quarters of especially strong demand suggest that the need for the care and housing provided by senior housing is recognized,” said Chuck Harry, NIC’s chief operating officer. “If demand and supply trends continue at their current pace, senior housing occupancy will recover during 2024.”

Demand outpaced supply in both assisted living and independent living properties, but assisted living properties continued to recover faster than independent living. The assisted living occupancy rate within the NIC MAP Primary Markets improved 0.9 percentage points from the prior quarter to 82.6%, while the independent living occupancy rate improved 0.7 percentage points to 86.1%. Occupancy within assisted living properties from NIC MAP Secondary Markets has fully recovered, with the rate 0.1 percentage points above pre-pandemic levels of 84.2%.

Tight financing continues to influence senior housing inventory growth and new construction. Inventory grew by 0.4% or 2,806 units from the prior quarter. Year-over-year inventory growth was 1.3%, near its smallest year-over-year increase since 2012. The number of senior housing units under construction relative to the total existing senior housing inventory was 4.7%, down 3.0 percentage points from the time series high of 7.7% recorded in the fourth quarter of 2019 and the lowest since 2014.  

Despite the strong demand, there are still 109,358 unoccupied units in the NIC MAP Primary Markets and 32,722 units under construction.

“The story of the past several quarters has been strong demand and slow inventory growth, but a significant number of units remains unoccupied,” said Caroline Clapp, NIC’s senior principal. “Senior housing and care operators are well-positioned to meet the needs of older adults who increasingly need these services. 

Boston (89.8%), Baltimore (88.0%), and Tampa (87.0%) had the highest occupancy rates of the 31 NIC MAP Primary Markets, while Houston (79.4%), Las Vegas (79.7%), and Atlanta (81.0%) recorded the lowest.

A summary of the NIC MAP Market Fundamentals Data, by NIC MAP Vision, is below. The Market Fundamentals report will be available at 4:30 p.m. ET on Thursday, October 5, 2023.