By the year 2040, it’s estimated the United States will need about 1.8 million more senior housing units to accommodate the growing number of senior citizens. That will mean that demand doubles over the next 20-plus years. The increase is expected to really take off after 2025 as baby boomers reach the 80-year mark, and then continue to age and need more housing options than are currently available.
1. Purchasing Power of Boomers
There are around 74.9 million baby boomers in the United States, making them and millennials two of the largest generations with enormous buying power. As a whole, the baby boomer generation spends the most money out of all categories, including housing. Their spending is expected to increase by 58 percent during the next 20 years.
Seniors not only have money to spend, but they are demanding more options for retirement living and they expect communities and viable options that feel like a home away from home.
2. Increased Development
Because of the rising demand for retirement living, real estate development in this area is on an upward trend. People are looking for options where they won’t have to move every few years. This includes centers that offer condo-like apartments, to assisted living, to nursing homes and full care.
In addition, changes to meet the medical demands of these patients must be considered. Existing facilities see the need to adapt what they have available and offer more complex, multifaceted solutions, which equates to remodeling projects. At the same time, new centers are being built that include everything from living quarters to medical care to restaurants and entertainment and community complexes. As baby boomers begin to plan for their futures, they should consider everything from financial stability to a sense of community.
3. Specialized Services
Some issues require more specialized services for patients who’ve developed issues such as dementia, need physical therapy or are dealing with very specific but common health issues. Expect medical facilities and care facilities to team up more and more often to provide targeted options for senior citizens.
4. Attracting Investors
Senior housing is attracting attention from an investment standpoint, even from foreign investors. In Portland, Oregon, the metro area has a 93 percent senior housing occupancy rate. Seniors are looking for facilities rather than a standard home to live in, and the demand increases every year.
As corporations and individuals invest in senior housing, expect to see more and more complex options for seniors. As mentioned, a complete solution that provides everything the senior needs — all in a single location — is quite desirable and allows the senior to interact with a small community of fellow residents while living somewhat independently, or getting that extra boost of help needed in their twilight years.
5. Finding the Best Area
Independent senior living and assisted senior living are two of the most desired options by seniors. Some areas of the country, where it is inexpensive to get into the market, there is an oversupply of available senior housing. However, in other areas, there is a serious shortage. If you’re a senior having a hard time finding affordable housing, one solution is to go to a nearby city that is over sourced and see if you can get a better rate or get more for your money.
Driving Demand and Getting Value
As America’s population continues to age and demand for housing grows, expect to see a wide variety of potential amenities and options. Take your time and find the best place for you or your loved one, where you feel comfortable and can participate in the activities you love. You’ll also want to compare prices based on amenities and look at a variety of options in your town and surrounding areas.
• Holly Welles is a real estate writer and the editor behind her own blog, The Estate Update. She loves helping readers figure out how to utilize the real estate market for their own financial benefit. You can catch more curated advice on her Twitter feed @HollyAWelles.