January 18th, 2019
Why is senior housing such a great investment in 2019? High demand and low supply! The aging population in the United States, especially Florida, Georgia, North and South Carolina, is growing quicker than construction can keep up with.
In 2015 the number of Americans 65 and older was 47.8 million, thanks to the aging Baby Boomers this number is projected to increase to 79.2 million by 2035. Creating a high demand for senior communities.
New Construction of senior housing started declining in 2008 and remained that way well through 2011. There was limited growth through 2014. This has left a big deficit for quality communities designed for our aging population.
Investors can expect the revenue for senior living to increase. According to the National Council of Real Estate Investment Fiduciaries, senior housing complexes has increased in value, in 2014 it surged to 18.7 percent, which outperformed value increases in multifamily housing at 10.3 percent, office at 11.5 percent, and retail at 13.1 percent.
Senior living Is Not Only Driven By Demographics, But Also By Need
Increase Demand From Aging Baby Boomers
Baby Boomers are still the largest demographic in the United States. They will be looking forward to their retirement and need somewhere to do it. The US Census Bureau recently estimated, today there are over 8.5 million Americans 83 years old or older, (83 years old is the typical senior housing resident). By the year 2025 they predict this population will increase to 10.2 million. This increased demand makes it a great investment strategy.
Lack of New Senior Communities
Much of the senior housing on the market is outdated, with 32% is over 25 years old and 58% are older than 17 years. The development of senior housing has changed significantly over the last decade, with new regulations, improved amenities, and more modern taste. According to recent studies, senior housing is one of the top prospects for multifamily properties.
There is no doubt new construction and renovations of senior housing is a great investment, partnering with a construction group who is a leader in the industry, makes it even better.
Check back with us next week for more information on senior housing communities, until then contact SWET Construction group for more information.