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The national story for senior living housing is fairly straightforward right now. There appears to have been overbuilding as developers overestimated current demand and they are now adjusting their construction pipeline as they wait for the arrival of baby boomers. At any rate, at bottom, senior housing is a local business and based on various reports, developers believe that many areas are still underserved and potential demand is simply a matter of identifying those markets. However, a recent report from the Kroll Bond Rating Agency, points out that demand in this space can be uncertain, and more importantly, can change abruptly.

Here are two reasons why, according to the report:

Delayed Retirement and Aging in Place

A report by the AARP Public Policy Institute found that 87% of adults age 65 and older want to stay in their current homes as they age. In addition, many boomers are deferring retirement with more than 20% of Americans age 65+ working or looking for jobs, compared to 10% in 1985, according to information from the US Census Bureau and the Bureau of Labor Statistics population data that was analyzed by financial planner United Income. BLS estimating that 13 million Americans age 65 and older will be in the labor force by 2024.

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Erika Morphy

Erika Morphy has been writing about commercial real estate at for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.

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