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When it comes to deciding where to build new senior housing communities, developers and investors need to look beyond the surface of migration trends. While migration patterns provide useful insights, they should be integrated into a broader analysis. Our findings, drawn from 5-year population growth estimates by Nielsen Claritas and senior housing data from NIC MAP Vision, offer a nuanced perspective on future market selection which is essential for making informed decisions regarding future development. 

Migration and Senior Population Growth 

One of the most important insights from our data is that migration should not be the sole factor driving market selection. Although positive net migration suggests potential demand, substantial growth in the senior population can occur even in markets with minimal or negative net migration. This is largely due to the phenomenon of aging in place, where current locals grow older and remain in their neighborhoods. For instance, seniors currently aged 75-79 will move into the 80+ category over the next five years, significantly contributing to the market’s growth. 

 In examining Houston and Atlanta, two metros with high net-positive migration, we find that these areas exemplify the complexity of relying solely on migration data. Despite their strong migration numbers, both cities have relatively low senior housing occupancy rates, with 18% of Atlanta’s and 11% of Houston’s senior housing supply added in the last five years. These figures suggest an oversupply that predates the pandemic, yet this is not necessarily a negative indicator. It points to the potential for future growth as demand inevitably catches up with the current supply. 

The Dynamics of High Net Migration Markets

High net migration markets such as Houston and Atlanta often experience rapid development and increased competition. This influx of new inventory can result in sustained lower occupancy rates and below-average rent growth, challenging the short-term profitability of new developments. However, these markets also offer significant advantages, including quicker time to market and the availability of financially viable land, which can streamline the development process.

In the long term, these high migration markets promise continued demographic growth from both seniors aging in place and ongoing positive net migration. This makes them attractive for developers willing to invest with a longer-term perspective. Yet, the immediate challenge lies in managing the competition and extended lease-up periods that typically accompany new developments.

Analyzing the Data: Key Insights

The following scatter plot visualizations provide a deeper understanding of these dynamics. The first chart, which correlates total population growth with senior housing occupancy rates, reveals that cities like Raleigh and Nashville are strong candidates for new developments due to their high occupancy rates and robust population growth. Conversely, markets like Houston and Atlanta, despite their high growth rates, face lower occupancy rates due to recent overbuilding. 

 

The second chart, focusing on the percentage of senior housing inventory added since 2020, highlights metros like Atlanta and Houston, which have aggressively expanded their senior housing supply in recent years. This approach suggests that these markets are preparing for anticipated demand increases, though it also means they currently have lower occupancy rates as new inventory is absorbed. 

The third chart, examining the relationship between population growth and annual rent growth, shows that markets such as Riverside, Orlando, and Jacksonville have strong rent growth, which can enhance investment returns. Meanwhile, cities like Seattle and Sacramento present stable conditions with moderate rent growth, making them steady options for new developments.

Strategic Recommendations

For developers and investors, the key takeaway is the necessity of a holistic approach to market selection. Migration is a valuable metric but must be considered alongside other factors like existing senior populations, local aging trends, and market saturation. Monitoring supply and demand dynamics is crucial to avoid the pitfalls of oversupply and ensure that new developments are well-timed to meet emerging demand. 

Focusing on long-term growth is essential, particularly in high net migration markets where immediate returns may be tempered by competition and extended lease-up periods. Leveraging comprehensive data sources, such as those provided by NIC MAP Vision, can offer critical insights, and help developers navigate the complexities of market selection with greater confidence. 

Conclusion

In the ever-evolving landscape of senior housing, selecting the right markets for new developments requires a multifaceted approach. The analysis reveals that high migration markets offer both opportunities and challenges. The availability of financially viable land and faster speed to market are significant advantages, yet the high competition and longer lease-up periods in these areas necessitate a longer-term investment perspective. Developers must balance immediate market conditions with long-term demographic trends to ensure sustainable growth and profitability. Utilizing comprehensive data sources, such as those provided by NIC MAP Vision, can offer a competitive edge. NIC MAP Vision’s robust data on senior housing supply, occupancy, and rent growth, combined with demographic projections, equips developers with the insights needed to navigate these complex market dynamics effectively. 

NIC MAP Vision stands as the premier source for micro-market data, providing unparalleled insights into population and supply trends. By leveraging this data, developers and investors can identify emerging opportunities, anticipate market shifts, and make data-driven decisions that align with both current and future demand. As the senior housing market continues to evolve, the ability to access and interpret detailed, localized data will be key to success. NIC MAP Vision’s comprehensive datasets and expert analysis empower stakeholders to stay ahead of the curve, ensuring that new senior housing communities are not only viable but also thrive in the dynamic and competitive landscape. 

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