Markets in Focus
The outlook for senior housing is positive in the long run, with demographics working in the industry’s favor. The first of the baby boomers will be 83 in 2029 and the last turns 80 in 2047. In the short-term, however, owners and operators of these residences will need to weather challenges related to higher costs driven by labor availability, inflation, and higher interest rates offset in part by lower new construction rates relative to historic trends that will benefit existing communities.
Replacement costs have dramatically increased over the past several years, given the shortage of labor, higher building material costs and general supply line uncertainty. During these times of relatively rapid changes in replacement costs, it’s important for owners to keep pace with appropriate insurance limits to ensure adequate replacement costs.