Consumer Preference for New Construction Rises Amidst Slowdown

A recent article published by McKnight's Senior Living noted that new construction in the senior living vertical continues to decline, despite NIC data which notes that occupancy has increased for the last eight quarters, indicating a robust and growing market. Intrigued by the interplay of consumer demand and market supply, we took a look at leading interest indicators for new construction properties. 

In spite of the reported downturn, new construction projects in senior living continue to pique consumers' interests, and show impressive performance stats. These properties have increasingly captured the hearts and minds of families in the discovery and decision phase, demonstrating the strength of consumer demand for these new and modern properties.

New construction search outperforms established properties 

Seniorly analyzed average search impression volume for a twelve month period and found that impression volume per community was, on average, double that of leading providers' communities. While established communities have the tremendous benefit of word of mouth and visibility, these new construction properties are outperforming by a significant factor - likely due to advance promotional efforts , the power of social media - and of course, the compelling nature of these properties as an option on the shortlist. Whether luxury or mid-market, these properties typically showcase modern design and approach to aging. This shows a significant market interest in these new phenomenons, despite the declining construction trend.

New construction click rate from SERPs over 240% higher

Perhaps one of the most revealing elements of the research was the remarkable difference in click-through rates from search engine results pages (SERPs). The new construction properties delivered a click-through rate that was 240% higher than top properties over the course of a 12 month period. Once consumers search for - and find - new construction properties, they are eager to learn more.

New construction conversion to lead rates average 77% higher

Even better, these impressions and clicks are converting into tangible business outcomes for providers. Our data showed that new construction properties witnessed a 77% higher conversion to lead rate when compared to top properties. And this was across all price points - not just high-end luxury builds that seem to dominate the headlines. Not only are more people searching for and viewing new construction offerings, but the fresh design, modern amenities, and compelling photography are moving people to action.

Move-in data mixed 

Not surprisingly, data on move-in rates is somewhat mixed. For properties which had opening dates consistent with a family's initial timeline, conversion rates were on par when the actual and projected opening timelines were within range. Likely some of the early funnel gains are degraded by common challenges during the buildout process: a lack of information about key decision drivers like Director and programming, a nascent sales team, and the inability to tour until licensing is complete.

Another potential roadblock for fully realizing the opportunity of new construction likely lies in the all-too-common construction delays.  Using data from a parallel industry of early education, construction delays can erode up to 70% of early funnel lead gains in advance market efforts.  Sales and marketing teams need to work overtime to keep prospects engages and informed throughout the delay cycle.

Contrary to what the construction data trend suggests, these statistics show that new construction properties in the senior living sector are not just holding steady but are growing in demand at a rate that outpaces the overall demographic growth in the market. These properties are not just catching eyes but are delivering large volumes of opportunity, demonstrating that market demand for new construction in the senior living sector is anything but waning. 

About the data:

Seniorly analyzed new construction properties which were live on our site prior to September 2022 and used a control group of communities operated by senior living providers with the highest community counts, as defined by NIC data.  Controlling for community size and care type, we looked at search volume, click through rate and conversion to lead rate trends between 9/1/22 and 8/31/23. We compared the growth between the beginning and end points, as well as the 12 month averages. SEMRush was used to deliver all third party Google data.