The first day of the National Investment Center for Seniors Housing & Care Fall Conference focused on key market trends and opportunities concerning middle-income customers in the seniors housing space. Around 3,300 attendees, an NIC record, are at this year’s conference in Chicago, according to Brian Jurutka, president and CEO of NIC.
- A recent NIC study has revealed a substantial private-pay seniors housing and care market currently not being served. This is the cohort that does not qualify for Medicaid, but may not have sufficient resources to pay for private seniors housing as it exists today. More than half of these individuals are projected to have mobility limitations by 2029, in addition to other health care needs.
- In total, there will be over 14 million middle-income seniors in the U.S. by 2029, according to Beth Burnham Mace, chief economist with NIC. This is around 6 million more than today. “This is a huge underserved market, but it will grow enormously in the future,” says Robert Kramer, founder and strategic advisor for NIC, about middle-income seniors. “We’re not, by any means, suggesting the private sector alone can meet the needs of this market. It’s not realistic, it won’t happen. But we have to identify who is this market, how big is it, what are their needs, what can they afford, what are going to be their health and caring needs, not just housing, and then begin to get creative on how we’re going to address this market. We’re going to need support from the policy side.”
- The average out-of-pocket cost an of assisted senior living facility is around $60,000 annually, according to Mace. The study finds if operators can lower that cost to around $50,000, approximately 2.5 million more seniors can then afford assisted living. This would create demand for around 700,000 new units, according to Mace. In comparison, today’s inventory of assisted living is at around 1.6 million
- To do this, attendees suggested lowering the cost of accessing capital, separating costs associated with building and land from operation costs and creating a model to take advantage of economies of scale.
- Nursing home occupancy had its first year-over-year increase since January 2015 in the first quarter of this year, according to NIC’s latest Skilled Nursing Data Report. In the next seven to 10 years, demographic growth in the sector will only continue to expand, as baby boomers age, according to NIC research.