NIC Notes

Insights in Seniors Housing & Care


By: Lisa McCracken  |  January 18, 2024

Five Senior Housing Trends Shaping Growth in 2024

Market Trends  |  Senior Housing

The year ahead will likely be a dynamic one for senior housing and care with unfolding trends that will shape our sector in meaningful ways for the next decade as boomers age into the demographic most likely to access housing and services. The five trends below highlight some of these sector growth predictions to watch in 2024.

  1. Is 2024 the year of the “Great Reset?” Many groups and industry experts feel that this year is going to be one of reconciliation. As transaction activity has dampened in recent years and bid-ask spreads were too large to move deals forward, we anticipate that there will be an industry reset to the reality of current valuations. Additionally, as loans are maturing, some with short-term extensions from the past year, owners may need to make difficult decisions regarding equity contributions and revised valuations for existing assets.
  1. A silver lining for distressed assets? While select groups in the midst of this reset may feel pain, potential acquirers may reap the benefits of attractive assets at a cost unavailable just a few years ago, perhaps at price points below replacement costs. Those opportunities could foster more affordable housing options for middle market older adults, a cohort that is expected to grow significantly over the next several years.
  1. Movement from the Fed. Unless there is a monumental unforeseen event, all indications point to rate reductions in 2024. Timing is the big uncertainty and is dependent upon key CPI and employment metrics, among others. December’s inflation figures released last week, which showed slight increases, somewhat muddied the waters on Fed strategy for the year. The timing and pace of anticipated reductions will shape strategies for acquisition and new development.
  1. Positioning for future development projects. We ended 2023 with dramatically reduced levels of new construction in senior housing. As occupancy levels climb and certain markets experience demand-supply imbalances, we expect to see renewed interest in development projects. The construction cycle has lengthened in recent years, and thus, new developments initiated now will have on average a roughly 24-month time period between commencing construction and community opening. We anticipate that certain sidelined projects may start to make their way back to the planning table.
  1. Avoiding Past Mistakes. What lessons have we learned from the last growth cycle in the senior housing and care sector, which peaked in years 2018-2019? Some anticipate that certain markets may potentially overbuild. Additionally, consistent operational oversight needs to keep pace with new growth. At the same time, we are falling short of projected future supply needs. As the sector continues to mature, it will be important to acknowledge lessons learned and to determine what should be done differently moving forward.

According to the Senior Housing News 2024 Outlook survey, most in senior housing are more optimistic entering this year compared to last year. NIC shares that optimism. There is a great need for more quality housing and care options for seniors, and the sector can benefit from this period of reset. The senior housing industry must be ready to respond to opportunities that lie ahead.

About Lisa McCracken

Lisa McCracken, Head of Research & Analytics at the National Investment Center for Seniors Housing & Care (NIC), oversees NIC’s research and analytics team, which develops actionable, data-driven insights on industry challenges and opportunities and showcases practical examples of how organizations nationwide are embracing opportunities to meet the demands of a changing marketplace. Additionally, Lisa oversees a robust research agenda with nationally recognized partners to help the next generation of senior housing and care leaders address evolving and dramatically different consumer preferences and needs. Prior to joining NIC, Lisa served as director of senior living research and development with Ziegler, a leading investment bank for senior housing and care, where she oversaw research staff supporting the senior living, senior housing, and related corporate finance healthcare practices. Lisa began her career as a research analyst at Holleran, a healthcare and aging services research and consulting firm, where she was successively promoted to become vice president of research, managing partner and ultimately president between 2009 and 2013. She is a nationally recognized thought leader and public speaker and has been the lead researcher on a number of national research studies such as the LeadingAge Ziegler 200 and other industry-wide publications.

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