Senior living. Later Living. Retirement Living. CoLiving. Care Homes. Active Adult. Assisted Living. Integrated Retirement Communities. Memory Care.
The list goes on and on, and while the names we use are unique in every country, we are all considering the same important questions: What does life look like as we age? Where do we go? Who will care for us? Where is the place we can call home?
In this SHHA brief, we explore the evolution of the United States’ senior housing market and two trends influencing its future.
In the US, the senior living industry is about 50 years old, but the history of senior living can be dated back to the early 1800s, when the very first small group homes came into existence. For quite some time, and even today, the culture in the US was of families caring for families. It was expected that younger generations would care for their elders and if they could not that burden often fell to local group homes that had very poor living conditions.
By the mid-1900s women were entering the workforce, people were living longer and many seniors were simply not getting the care they needed in group homes or their own household. Medicare and Medicaid came into existence in 1965 and paved the way for what we now call skilled nursing. These programs allowed local care homes to use federal funds to subsidize the care of those who had acute needs. This is a program that still exists today, but it is faced with increasing regulation, concerns about adequate funding and the ability to operate in today’s economic environment.
In the early 1980s there were several senior living pioneers who questioned the notion that skilled nursing was the only answer for the needs of our aging families. The very first assisted living communities were developed, bringing to life the idea that just because someone had medical or physical limitations, it didn’t mean they had to lose their independence.
Since then, senior living has undergone a remarkable transformation and has grown significantly to include several different property types: Active Adult, Independent Living, Assisted Living, Memory Care and Continuing Care Retirement Communities. In Assisted Living alone, there are over 30,000 communities that are home to nearly 1 million Americans. It is a unique industry where real estate, health care and hospitality intersect.
A Changing Demographic
According to US Census Bureau projections, by 2030, the baby boomer generation will have turned 65. This means that over 71 million people will be of retirement age and considering their living options for the future.
This changing demographic hasn’t gone unnoticed, with senior living investors, operators and developers preparing for the coming wave of seniors who will have very different expectations compared to previous generations.
The best example of this right now is the fast-growing senior housing category called “Active Adult.” Active adult developments are purpose-built communities designed specifically for seniors with a strong emphasis on lifestyle and resident-directed programming. They tend to attract a much younger resident (early 70s) and have a lower price point compared to the more traditional independent living and assisted living communities. With home mortgage rates increasing, many seniors find this kind of apartment-style living financially appealing, compared to downsizing and purchasing a smaller home.
The consumer of today has many faces and often it’s not only the prospective resident considering their options, but also their adult sons and daughters who are influencing their choices. It’s very common to have prospective families looking at five or more options before making a decision.
Senior living sales and marketing was forever changed during the pandemic and today’s consumer has emerged wanting education, transparency and easy access to answers. Over two thirds of senior living leads now come from digital sources and community sales teams are under pressure to respond faster than ever to these inquiries. As a result, operators have invested in sales enablement technology (video, virtual tours, automation, live chat, etc.) to improve the consumer experience and drive better results.
Forward-thinking senior living companies have realized that the greatest competition they face is not necessarily other communities, but the likelihood that many prospective residents will choose to stay in their homes. In order for someone to make a significant life change, there must be a compelling reason or clear value to move forward. The consumer journey needs to anticipate their questions, recognize their concerns and help them envision how life could get better, no matter what your age might be.
At its core, senior living is about selling change. The more we listen to our prospective consumers and meet them where they are in the journey, the faster senior living will grow.
Author: Jennifer Dixon, Founder and CEO of JD Solutions Group, a sales coaching, training and consulting firm supporting senior living sales professionals, operators and investors.