Now may be a good time for cost-conscious seniors to consider moving into a professionally managed home.
The cost of senior living facilities is growing much more slowly than overall healthcare costs as new construction catches up to demand and leads to price stability, according to a report just released by A Place for Mom, the largest senior living referral service in North America.
The company’s 2018 National Senior Living Cost Index, which draws on unique pricing data, reveals that the median monthly cost of independent living for seniors grew by 2.6 percent from 2017 to 2018, rising to $3,942. The cost of assisted living inched up 2.4 percent in the same period to $3,942, and memory care gained 3.2 percent, reaching $5,003. By contrast, overall healthcare costs surged by 5.3 percent from 2017 to 2018.
“There has been a ton of development in the senior living sector,” Sue Johansen, the company’s vice president of Partner Services told Multi-Housing News. “We’ve had some development at the very high end. We’ve also had development in some of the secondary markets that haven’t been as saturated. New geographies are seeing supply at rates they haven’t before. So that has really helped to keep some of those costs down.”
Secondary markets from suburban Chicago and Chattanooga, Tenn., to Colorado Springs, Colo., and Tucson, Ariz., have become hives of senior housing construction aimed at baby boomers who are aging into the marketplace. The growth of construction over the past few years has sparked significant competition for residents and improved options for consumers across the price spectrum, according to Johansen.
Cities, regions diverge
A Place for Mom’s Index derives from the company’s large database of people that have settled into senior living and assisted living homes between 2012 and 2018. The data, which captures the non-discounted rates that families actually pay, sheds light on cost variations among regions and metropolitan areas.
Portland was the fastest-growing metro market for both assisted living and independent living, with costs skyrocketing 11.2 percent and 13.9 percent in the two categories, respectively. Los Angeles and Chicago also saw strong price growth for assisted living from 2017 to 2018, while independent living costs rose most rapidly in Charlotte, N.C., Seattle, Minneapolis and Sacramento, Calif.
Regionally, the Western part of the U.S. saw prices grow at the fastest clip, at 4.3 percent in the same time period. The Northeast registered a 3.1 percent increase, the Midwest grew 2.6 percent and prices in the South dropped 1.5 percent.
A ranking of the most expensive metro areas for senior living looks like a list of the country’s priciest rental markets, with Boston topping the list for all categories and San Francisco, New York City, Washington, D.C. and Seattle all in the top five.
Luxuries offered to lure boomers
The sharpening competition for senior customers means a greater variety and quality of offerings are coming to the market.
“There’s a lot of development at the luxury level, because as the Greatest Generation moves through senior living, they tended to live more frugally, foregoing personal luxuries for their children’s wellbeing,” Johansen said. “Now that the baby boomers are transitioning into senior living, there is a recognition of the demand for luxury goods and services to this sector.”
Boomers are the richest generation in history, and their exacting demands have given rise to a plethora of high-end senior communities that offer amenities from lecture series and virtual reality to concierge services and bars. Market segmentation is also on the rise, with a growing number of properties that cater to specific religious and cultural groups.