“Aging in Place” is the both the desire and mantra for many senior homeowners. And new technologies are making it possible to age in place for those wanting to remain in their homes near their family and friends.
However, this aging in place desire is threatening one of commercial real estates biggest bets…that aging Boomer will leave their homes for senior housing facilities. In the last five years alone, investors have wagered billions of dollars on facilities that provide, housing, food services, medical care and assistance living for 72M people born between 1946-1964 in hopes that these one in five aging people will move. This bet could be one of the most costly real estate miscalculations in recent housing market history.
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As stated up top, new technologies are enabling seniors to age in place. Tech experts are expecting $1B from new venture capital sources in this year alone to spur tech products and services to help seniors navigate their lives in their existing homes. Sensors that respond to medical conditions, facial recognition and houses with malleable fixtures are adjustable and adaptable to people’s changing needs as they age.
New senior housing is expected to hit 3.5% of the total housing supply by 2025. And with that new senior housing, some design firms are looking to create homes with height adjustable sinks, living rooms that can be converted into bedrooms and cabinets that enable the homeowner to see what’s inside a cabinet with just a touch of a finger.
Other investors are buying and developing properties with amenities such as village squares, pools, cafes, gyms and mixed-use office spaces for start-ups and places for seniors to study new technologies that enable them to age in place. Tech firms, such as LifePod Solutions, are launching new voice-recognition services that can initiate conversations with seniors and their caregivers, both on-site and off, to ensure that seniors are getting what they need to function and that they have quality social engagements to help prevent loneliness and isolation.
Now that the typical move-in age to senior housing is 84 to 85 years old, according to Green Street Advisor, and occupancy rates in senior living facilities dropped to 88% in Q3 2019 from 90.2% in Q4 2014, this “aging in place” movement with its associated technologies could undercut demand even further. According to Dominic Endicut, co-founder of 4Gen Ventures, “(As yet undiscovered cutting edge tech) could further drain away younger new customers for senior living. Then, your base population is older and you’re even less attractive to younger seniors.”
Thanks to MansionGlobal’s Peter Grant for source data.
Also read: Homeowners More Likely To Be Equity Rich Than Underwater in Q3 2019, A Smart-Home Neighborhood – Creepy or Convenient?, Apple Steps Up to the Plate with Google and Facebook to Confront CA Housing Crisis