In the top 31 markets in the U.S., seniors housing occupancy has posted its third consecutive quarterly increase, according to NIC MAP data. Combining assisted and independent living, the first quarter of 2022 posted a 20-basis point increase from the previous quarter to 80.6%, and up 250 basis points from the first quarter of 2021. While smaller than we would like to see, we will take it. The pandemic low was 78.0% in the second quarter of 2021, according to the data.
Assisted living posted the largest increase in census among the three major categories, increasing by 50 basis points from the fourth quarter to 77.9%. This is up 370 basis points from the pandemic low of 74.2% in Q2 2021, but still way below the pre-pandemic level of 84.6%. For perspective, assisted living occupancy in the first quarter of 2017 was 86.7%. It should be noted that this is the first time that the assisted living sector has posted an occupancy increase in the first quarter of any year during the past 13 years. Even though it is coming off an historic, pandemic-induced plunge in occupancy, it is still big news that this trend has finally been broken.
Independent living communities did not fare as well. They lost about 10 basis points of census in the first quarter, dropping to 83.1%, but still up 140 basis points from the pandemic low of 81.7% in Q2 2021. The current level is far below the pre-pandemic level of 89.7%.
The skilled nursing sector is gaining back lost census as well, posting a 40-basis point increase from the fourth quarter of 2021 to reach 77.6%. This is from a pandemic low of 74.1% in the first quarter of 2021, but well below the pre-pandemic level of 86.6%.
Welltower just gave a preview of what may be in store for its first quarter 2022 numbers, and census is generally moving in the right direction, with first quarter census results expected to exceed previous estimates. First quarter year-over-year occupancy growth is expected to be about 420 basis points for its SHOP portfolio, which would put it just below 77%. Sequential occupancy growth is now expected to be about flat with the fourth quarter, compared with a previously expected decline. In addition, spot occupancy increased by 40 basis points in the first quarter, with an apparent significant acceleration already in April, despite less than a week into the month.
Since the first quarter is always a difficult one, if the sector can maintain the gains and momentum from last Spring it will bode well for the rest of the year. With 2020 and 2021 construction starts much lower than the previous several years, that will also help push census up as fewer new units suck up what should be increased demand.
