New Senior Living Construction Starts Likely to Bottom Out in 2024

A recent analysis from NIC suggests that the number of new senior living community construction starts is expected to reach a low point in 2024, possibly not seen since the start of the Covid-19 pandemic. The analysis indicates that the median duration of construction has been increasing and, coupled with difficulty getting projects started, has led to other forms of strategic growth for senior housing companies, such as through acquisitions. If the Fed lowers interest rates in 2024, that could potentially bring back “tabled projects” into active planning. The report also highlights the impact of the current lending environment, high interest rates, inflation, and capital market conditions on the feasibility of new construction. Although the trend data reflects the overall sensitivity of the senior housing market, regional data indicates unique challenges and opportunities for development in different regions. Looking ahead, there is uncertainty about whether the lengthened construction cycles will continue or decrease back to shorter cycles seen in previous years. Despite these challenges, there is optimism about avoiding continued lengthening of the construction cycle through disciplined execution.