By Chris Cobb | Associate
Welcome back to the Big3 with CC, your weekly real estate investment source. It’s 2018! Time for all those New Year, New Me posts and hopes. Let’s make them last this year. On the sports side, college Football is gearing up for an all SEC final with 3-time returner Alabama and Georgia duking it out. It should prove to be a good one. The Invest RE Big3 will be changing up its approach this year so stay tuned. Today, we are going to talk about Senior Housing and why it is on the rise:
Boomer Population Age
The boomers are hitting those Golden Years and, as a result, are moving, downsizing, and potentially needing assisted living. If you use 1946-1964 as your range, there are currently 74 million boomers that are 53 to 71 years old. This means that the boomers will be taking the place of the highest percentage of our elderly population in the near future. What does this mean for senior housing? More needs to be built due to the fact that the boomers will be a more populous elderly group.
Steady New Construction
In addition to an increasing population, the product is outdated. Technology, services, and amenities have improved significantly over the past decades and need to be either incorporated, retrofitted, or built new. In Q2 of 2017, current construction as a share of existing inventory was 5.8%, which was only 0.8% off the high 6.8% it achieved back in Q3 of 2016. This growth has been concentrated in the following seven areas: Dallas, Minneapolis, Chicago, Atlanta, Houston, Miami, and Boston. What’s interesting about those seven markets? Three located in colder climates. This construction trend is nationwide.
Buyers & Investors Agree
According to the National Investment Center (NIC), when their investor sources were asked to rank the attractiveness of investing in property types on a scale of 1-10, senior housing was the only sector to achieve higher than a 7. Retail, office, industrial, hotels, and apartments all trailed behind. According to the same sources, the future is bright for senior housing with about half of the respondents reporting that they will be investing in senior housing next year.
When it concerns real estate, invest yourself.