The greater Seattle area is one of the most dynamic and thriving regions in the country. The Northwest has always been known for its natural beauty, bustling tech industry, and diverse cultural amenities. However, as the U.S. population continues to age, demand is outstripping availability for senior living options.
A recent report by Integra Realty Resources sheds light on the rising demand for senior housing and care options.
Estimating Senior Housing Demand
The report reveals significant growth of the 75+ demographic: the number of Americans age 75+ was 18.5 million in 2010 and is projected to be 24.4 million by the end of 2023. This growth is expected to continue over the next five years.
However, the report highlights that estimating the total demand for senior housing is not enough to determine the exact number of units required to meet demand. Developers and investors must consider many factors, including current demand, market availability, current units under construction, and the 5-year demand.
The Growing Demand in Seattle
The report identified the greater Seattle area as needing more than 2,300 new units to meet demand.
This growth of the 75+ population in Seattle increased at an annual rate of 2.29% from 2010 to 2020 based on Census Bureau data. The growth from 2023 to 2028 is forecast at 3.35% which is 46.3% higher, due to baby boomers entering the market.
The greatest amount of new supply has occurred in memory care while there has been a decrease in skilled nursing availability.
Addressing Affordability for Seniors
As the demand for healthcare, housing, and other services catering to the needs of older adults continues to increase, it is essential to address the affordability issue. While Seattle offers a range of senior housing communities, the cost of senior housing remains a significant concern. According to the National Investment Center for Seniors Housing and Care, the average cost of senior housing in Seattle is $77,000 for assisted living, $53,000 for independent living, and $104,000 for memory care, which is approximately 14% higher than the national average. These higher costs make senior living unaffordable for many seniors.
Some states, including Washington, offer financial assistance programs such as Medicaid to pay or help pay for assisted living for eligible individuals. However, many seniors still must pay housing costs out of their own pockets, using their savings and selling assets to fund their stays.
The report states that it is crucial to consider the financial resources of seniors and the growth in the senior population when assessing the future demand for senior housing.
Seniors with higher incomes are also a significant factor to consider in senior housing demand. Currently, there are 6.5 million U.S. householders over the age of 75 with incomes above $50,000, projected to increase to 7.9 million by 2028. The $75,000+ demographic is expected to grow even faster at 5.0% annually, making it an important factor in determining senior housing demand for newer facilities that will likely compete towards the higher end of the market. The 75+ age demographic with annual incomes of $50,000 and higher, has the highest correlation to senior housing demand across all levels of care, according to the analysis.
Bradley Schopp of Integra Realty Resources, which provided the report, concludes that the greater Seattle area’s thriving tech industry, highly educated workforce, and high standard of living make it an attractive destination for developers and investors in the senior housing industry. As the senior population continues to grow, it is up to developers and investors to adapt to these changes and provide innovative and affordable solutions to meet the demands of this growing demographic. “With the right approach, the senior housing industry in the greater Seattle area has the potential to thrive in the years to come.”
For more information on healthcare and senior housing market studies and valuation topics, please visit https://www.irr.com/healthcare-and-senior-housing.
