Aging Baby Boomers to Increase Senior Housing Demand by 50%
A Silver Tsunami is about to hit the United States, swallowing up the current stock of senior-friendly housing and triggering a further boom in the senior housing market. In just over 10 years time, 70 million Baby Boomers will be entering the 65 plus age bracket. And by 2040, the demand for senior-friendly housing will increase by as much as 50% according to the U.S. Census Bureau. A good portion of these Baby Boomers also have the money to spend, an estimated net worth of $3 trillion, on high-quality housing. The sheer size of this demographic coupled with a longer life expectancy is propelling investors and developers into the senior housing sector.
In preparation for this influx of older Americans, inventory is already growing, with highest concentrations of development around several major metro areas including Boston. Across the country inventory growth and absorption are at their highest levels since 2006, the first year the National Investment Center for Seniors Housing and Care (NIC) began tracking this data. Even with this new stock of homes, occupancy numbers remained stable through the fourth quarter of 2017 at around 91% for Independent Living and 87% in Assisted Living according to the NIC. These vacancy numbers do look promising considering that we have not yet entered the 20 plus year surge in older residents that are on the horizon.
With the growth in the senior housing market, a change in design is also taking place. Active Adult and Independent Living facilities are being rethought in hopes of attracting younger seniors with more active lifestyles. When leaving the empty nest, many of today’s “active adults” are expecting high end and social amenities coupled with the accessibility elements, like single floor living, wide halls, and doors, and zero-step entrances they need. Along with these luxury units, there will also be a sizeable need for middle market housing that can offer value instead of extravagance. Developments featuring studio units, or a shared kitchen space could offer more budget conscious seniors the affordability they are looking for.
Along with new construction, many existing continuing care facilities have already begun renovating to keep up with these new market trends. South Coast Improvement Company, based out of Southern Massachusetts, has renovated over 150 senior and healthcare facilities during their 20 years of business. A large portion of these projects have been for Atria Senior Living, which operates 200 communities throughout the U.S. and Canada. Along with renovating hallways, kitchens, and other common areas these projects often call for the inclusion of cutting-edge amenities, like the meditation room and cyber café added to Atria Aquidneck Place. These types of features are key in marketing to the “active adults” looking to maintain their social and healthy lifestyle.
By 2035, 1 out of 3 households in America will be headed by someone over the age of 65. Developers are breaking ground now in anticipation of this huge surge in the aged population while others are making plans to get into this market based on the tremendous demand predicted. The Design-Build service offered by South Coast Improvement provides an integrated delivery process to ensure timely completion of projects. Working from a single source model, whether constructing a first-class property or targeting the potentially underserved middle market, makes certain the client’s needs are met.
Undoubtedly, a senior housing boom is underway, but we have only seen a small trickle of the 76 million Baby Boomers enter the market. When the silver tsunami hits fully developers and investors who have taken action now to address the needs of tomorrow will be ahead of the curve and positioned well to capitalize on this unprecedented growth.
SCI offers a range of design, construction, and construction management services. They are engaged in projects across a wide variety of sectors including office buildings, interiors, healthcare, education, commercial, assisted living, and planned communities/residential.
SCI gives its clients the advantages of a regional organization with resources throughout the Northeast, as well as professionals well versed in the local market - with knowledge of the subcontractor community, laws, etc.
The Design-Build Service Package offers an integrated delivery process for your project. Their experience in the field coupled works with our Design Team to develop, refine and execute the project from the clients vision to reality. The Design-Build paradigm eliminates the inherent conflict between the architect in the drawing room and the builder in the field that too often leaves the client in the middle. The “single source” model of fixed absolute accountability for both design and construction has become a preferred way to do business in Non-Residential Design and Construction.
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