Skip navigation
Is Seniors Housing Development Really Overheating? Most Markets Don’t See the Risk

Is Seniors Housing Development Really Overheating? Most Markets Don’t See the Risk

As concerns of overdevelopment in seniors housing have materialized, it is important to keep in mind real estate is local. While national rates of construction have been accelerating, most markets are experiencing modest, if any, active development. While not quite the 80/20 rule, the 20 most active markets represented 60 percent of overall seniors housing construction in the top 99 metro markets during the first quarter, highlighting construction is concentrated within select markets.

Outside of the Dallas, Houston, San Antonio, New York and Chicago metro markets, construction activity drops significantly. Those five markets represent a quarter of all seniors housing construction within the top 99 metro markets. Within the top five, only Houston and San Antonio have significantly high construction relative to their respective supply. San Antonio in particular stands out, as its construction represented 23 percent of its existing supply, by far the highest rate of construction across the top 99 metro markets during the first quarter. Austin, another Texas market, had the second highest rate of construction during the first quarter at 15.4 percent of its existing supply.

Most markets have manageable levels of new construction, with several having no construction at all. More than half of the top 99 markets have rates of construction of less than 4 percent, including 18 markets with no construction and many other markets with only a single property under construction.

Even within markets with multiple new properties under construction, unless they are in immediate proximity they likely won’t be in direct competition with each another. Properties that are more than 10 miles away from another typically wouldn’t be competing for the same residents, unless they are situated in a rural area.

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish