NIC Research & Data
NIC MAP® Market Signals
3Q10 Market Signal: Occupancy is Unchanged, But are Things Stable?
Recently released 3Q10 NIC MAP data reveals that seniors housing occupancy rates
were unchanged sequentially. At 87.7%, occupancy is level with 2Q10 but down 40
basis points (bps) from 88.1% in 3Q09. On the surface, occupancy appears to be stabilizing,
albeit at near bottom levels.
When looking market by market, things appear to be anything but stable. Just seven
of the top 31 metropolitan markets saw their occupancy rate change in the past year
by less than 50 bps. These markets could be deemed as stabilizing. The other 24
markets are either showing signs of increasing occupancy or signs that occupancy
rates are in decline. 11 of the 31 markets saw their seniors housing occupancy rate
increase by 50 or more bps YOY, while 13 registered an occupancy decline of 50 or
more bps.
Two such seniors housing markets to highlight examples of the instability are Riverside
and Boston. Riverside seniors housing is clearly showing signs of recovery. At 87.2%,
Riverside's occupancy rate is up 80 bps from 2Q10 and up 191 bps from 3Q09 (one
year ago). Furthermore, Riverside's occupancy rate is at its highest level in three
years (it was 88.4% in 3Q07). Could pricing adjustments be driving occupancy gains
in Riverside? That is unclear (NIC has yet to establish a relationship between YOY
rent growth and occupancy changes) but YOY rent growth, which was 3.0% two years
ago (3Q08) is now -1.1% in 3Q10.
Boston seniors housing has arguably held up very well during the past few years.
It had maintained 90%+ occupancy throughout the worst of 2008 and even up to 3Q09
when it was 91.7%. But occupancy has declined since then. The occupancy rate is
now 89.0%, which is down 40 bps from last quarter and 270 bps YOY. Inventory growth
is the most likely suspect in Boston's recent occupancy declines. Several new projects
have recently opened, and as a result, the seniors housing inventory has grown by
7.9% in the past year.
For data and analysis on your market, please consult the NIC MAP 3Q10 Metro
Market Reports which can be purchased in the NIC Store.
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