The number of people age 65 or older will double over the next forty years.
Growing from a population of 43.1 million in 2011, seniors will account for an astounding 83.7 million in 2050 or almost 20% of the population. Put another way, that means nearly 1 out of every 3 households in the United States, will be lead by someone who is 65 or older. With this significant increase, comes significant change which impacts the way people live, shop, and even entertain themselves.
The Nursing Home Trend
Senior living is undergoing big changes. As children, many of us visited family members in local nursing homes that housed dozens of elderly people in small hospital-like rooms. In a nursing home, each person has their own space with a few of their own belongs and they participate in activities that are mostly confined to the facility. But, as our population ages, the trend is moving away from the traditional nursing home environment. In fact, nursing home vacancies are increasing and nursing homes closures are now a topic of conversation. Many have closed their doors and the trend will likely continue.
Infographic by Assisted Living Today
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There are many reasons for this shift. The desire to remain independent for as long as possible is a strong contributing factor to the movement away from nursing homes. But the cost is another factor. It is significantly cheaper to provide in-home services or explore other options rather than paying for long-term care in a nursing home. For many, the nursing home is the last resort.
Senior Living in a Multigenerational Household is Becoming Increasingly Common
A new trend, called multigenerational living, has emerged. With multigenerational living, one or more generations live together on the same property. This means senior living includes living with children and grandchildren. This is common in other cultures but not nearly as common in the United States, until now. The latest reports show 1 in 5 Americans lives in a household that is characterized as multigenerational.
There are many reasons for this change in housing make-up:
- People are carrying higher student loan debt
- Increase in housing costs
- Childcare costs
- Childcare burden for parents with demanding jobs
- Overall level of debt
- The need to take care of aging or elderly parents, grandparents
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The Modern Multigenerational Home is Kicking Off New Development Opportunities
The new multigenerational living environment does not necessarily mean a parent is taking up a spare bedroom. The new design is actually far different. Builders have seen the shift and have embraced it. One of the early adopters to adopt senior living accommodations to a household is Lennar Corporation in Washington state. The NEXT GEN home design was introduced in 2012. The design provides privacy and separation, yet both families reside under a single roof. Families in these plans have separate entrances, their own living space, and even their own temperature controls, allowing for as much or as little interaction as both parties want.
Still, other families prefer the separate cottage on the property or space above the garage. That way the parent is still nearby but has a clear separation from the rest of the family. Whether the senior is under the same roof or not, senior living is impacting the way many families construct, remodel, or use the space on their property in levels not seen since the 1950’s.
Senior Housing – Don’t Overlook This One
Researchers at PricewaterhouseCoopers and the Urban Land Institute recently published the 39th annual Emerging Trends in Real Estate. Within the report, they highlighted the significant impact senior housing will have in 2018. Senior housing is expected to perform better than single-family home development and multifamily. New development is being driven by the baby boomers hitting retirement age. And, replacement of outdated inventory fuels development as well. Senior living means living and active living.
A wide range of options exists for senior housing. Some communities provide apartments for independent living or even small homes. Other communities provide or include assisted living for individuals that need more care and attention. Finally, for those that require the most support, there is an option of a nursing home. Senior living in these communities offer a wide variety of options to fill spare time, including golf courses, pools, entertainment, laundry service, housekeeping, meals, and transportation. For some, senior living is resort living. And, growth is not expected to slow down anytime soon. Investors have taken note. Senior housing is currently trading a rate between 6.5 percent and 8 percent while multifamily and student housing are trading lower.
Adult Day Care Centers – Another Growing Trend
Between 2011 and 2016, the adult day care industry grew by 4.1%. Today there are over 4,000 programs that exist to support senior living and other adults. These centers generally operate during the week and provide a wide variety of programs to entertain during the day. Approximately half of the people in these types of programs suffer from cognitive impairment or need help with daily living activities. Adult day care provides a low-cost option for families to support their loved ones and still manage their own households.
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Healthcare and Senior Living
Our aging population impacts another area of real estate as well – healthcare. Along with life expectancy increasing, unfortunately, there is also an expectation of disabilities increasing as well. This includes more occurrences of cancer and Alzheimer’s to name a couple of debilitating illnesses we will face as a society. But, other illnesses will challenge the current system too. By 2030, the American Hospital Association expects 1 in 4 Boomers to suffer from diabetes. Falls and obesity play a role as well in the need for additional services and medical-related space.
As providers assess the needs of the aging population, they are creating non-traditional spaces making it more convenient for patients to access. For some communities, this is converting retail space to medical out-patient offices. In other instances, high-end outpatient facilities have been built. Healthcare has been a growing real estate segment and shows no sign of stopping.
Senior Living – Final Comments
Throughout the blog, we touched different sectors that are expected to be impacted by our aging population – homebuilding, medical buildings, senior living centers and communities, and adult day care. But this is by no means a comprehensive list. More change is coming as our population ages. We have fewer younger people to care for the aging population. Increasingly, technology deployment is occurring to assist the aging population and to ease the burden of manual tasks for both caretakers and seniors alike. The future ahead is full of change.
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