With a sizable senior population, Florida is a well-liked retirement location. The need for senior housing choices, including independent living, assisted living, and memory care facilities, has increased significantly as a result. The COVID-19 epidemic has also brought attention to the significance of secure and encouraging elder-living communities.
A CBRE analysis claims that Florida’s senior housing market has been solid recently, with consistent demand and rising rents. Florida had a senior home occupancy rate in 2020 of 85.3%, higher than the national average of 82.1%.
The epidemic has had some effect on the market, though, as some seniors choose to put off moving into senior living communities because of their health. Occupancy rates in some places have somewhat decreased as a result of this.
Due to the aging population and rising demand for senior housing, Florida’s senior living housing industry is anticipated to expand going forward. The growing cost of building and potential competition from home health services and other in-home care choices might pose some difficulties, too.
Nevertheless, despite potential short-term difficulties, Florida’s senior living housing industry seems to have a bright future because of the state’s demographics and persistent demand for high-quality elder care.
What Will The Senior Housing Market In Florida Look Like In 2023?
Due to the COVID-19 pandemic’s continued effects, the Florida senior housing market may probably continue to experience difficulties. The pandemic has caused many industry disruptions, such as lower occupancy rates, postponed development projects, and higher operating expenses for operators. The market may also be impacted by modifications to governmental rules and regulations, including adjustments to the funding for Medicare and Medicaid.
Yet, it is anticipated that Florida’s senior population will keep increasing, which may result in a continuing need for senior home choices. This tendency may be particularly important when the baby boomer generation ages and transitions into retirement. The yearly shift in the Florida senior housing market through the fourth quarter of 2022 is detailed in the presentation and studies that follow. Importantly, NIC MAP, a significant resource for market actors in the seniors housing arena, was used to gather this information. The United States Census Bureau provided the population data.
MIGRATION
| Florida Population by Age Group | ||
| Age Group | Total Population | % of State |
| Population 45+ | 10,280,667 | 47% |
| Population 65+ | 4,598,386 | 21% |
| Population 85+ | 536,321 | 2% |
Source: U.S. Census Bureau
The post-pandemic in-migration mentioned above continues to support Florida’s growing senior housing market. Florida’s population increased by 1.9% during the second quarters of 2021 and 2022 or nearly 400,000 additional people.
OCCUPANCY
Before the COVID-19 epidemic, occupancy rates in senior homes were steady and healthy. Strong demand, with the exception of skilled nursing, was able to counteract the inventory surge that started in 2015. Occupancies rapidly reduced when the COVID-19 pandemic hit because there was less demand and more control, which hindered absorption. Occupancy started to moderately increase after the first halt in admissions caused by government rules and seniors’ hesitation to move into high-density housing. A significant influx of immigrants occurred, which increased demand in the state of Florida as laws around the nation, particularly in the northeast, continued to be restrictive.
| 4Q 2022 Stats At-A-Glance | |||
| Community Type | Stabilized Occupancy | Annual Change (bps) | Average Occupancy |
| IL | 84.5% | 315 | 82.6% |
| AL | 83.5% | 273 | 82.8% |
| MC | 81.9% | 253 | 81.2% |
| IL-AL-MC Combined | 83.8% | 287 | 82.7% |
| NC | 84.4% | 331 | 84.3% |
Source: NIC MAP® Data Service, 4Q 2022. FL Markets.
MONTHLY RENT GROWTH ON AVERAGE
Rental prices has continued to show a favorable trend even if occupancy has been under pressure because of the COVID-19 epidemic. Importantly, the market did not see a rental rate decrease even if growth in rental rates slowed in the latter half of 2020 and the beginning of 2021. All care levels showed the same good trend.
| 4Q 2022 Stats At-A-Glance | |||
| Community Type | Average Rent | Annual Rent Growth | Rent Period Type |
| IL | $3,814 | 4.9% | Monthly |
| AL | $4,716 | 3.4% | Monthly |
| MC | $6,103 | 4.4% | Monthly |
| IL-AL-MC Combined | $4,496 | 4.0% | Monthly |
| NC | $344 | 2.8% | Daily |
Source: NIC MAP® Data Service, 4Q 2022. FL Markets
Over the previous 12 months, rental rates for independent living, assisted living, and memory care increased by 4% collectively.
With a 2.8% increase in daily rental rates, skilled nursing care saw the least significant increase of all care levels. Importantly, despite the COVID-19 pandemic’s impact on rental prices in the previous three years, the rise in rental rates over the past five years has largely been steady.
CONSTRUCTION ACTIVITY
Notwithstanding COVID-19’s aftereffects, a stable construction cost environment and accurate forecasting based on healthy increases in occupancy and rental prices created a favorable climate for inventory expansion in the Florida market.
| 4Q 2022 Stats At-A-Glance | |||
| Community Type | Annual Inventory Growth | Construction vs. Inventory | Annual Absorption |
| IL | 4.6% | 8.8% | 8.9% |
| AL | 0.1% | 11.7% | 5.7% |
| MC | 0.8% | 1.3% | 6.4% |
| IL-AL-MC Combined | 1.8% | 10.0% | 6.9% |
| NC | 0.0% | 0.2% | 4.7% |
Source: NIC MAP® Data Service, 4Q 2022. FL Markets
In Florida, more than half of the inventory is older than 25 years, and just about a quarter of it was constructed in the last 10 years. In a post-pandemic context, just 3% of the inventory has been developed over the previous two years.
In the same way, as in historical eras, competent nursing underwent partial development. Seniors housing showed a rise in inventory over the previous 12 months, albeit not to the same extent as the pre-pandemic climate. Notably, inventory growth slowed in the second half of 2022 as difficulties securing finance for construction were brought on by rises in interest rates.
CONCLUSION
It is challenging to make a firm prediction on the state of the Florida senior housing market in 2023. The market may encounter both opportunities and problems as a result of factors including the COVID-19 pandemic’s continuing effects, changing demographic patterns, and adjustments to governmental policy.
As informed investors, we should understand the risks associated with real estate investing and that there is no guarantee. Please do your due diligence.
