Seniors Housing Weekly Update - Seniors Housing Bubble or Not?

March 3, 2015

March 3, 2015. 60 Seconds with Steve Monroe. Webinar attendees voted by nearly 3 to 1 that we are approaching a valuation bubble...

Seniors Housing Bubble or Not?

More than 125 people joined us live last week for our webinar on the Seniors Housing Market: Bubble or No Bubble. Acquisition values across the spectrum all hit new records in 2014, and as you can guess, cap rates across the spectrum all declined, but not to record lows….yet. If we are approaching a bubble, most of the panelists believed that trouble would not begin until 2016 at the earliest and 2018 at the latest. And they also believed that it was more likely that an outside event would be the cause of a market decline, such as a big jump in interest rates or some economic calamity, rather than an industry-specific event, such as too much development sending the market into a tailspin. When the webinar attendees were polled live during the webinar, by a nearly 3 to 1 margin, they agreed that we are approaching a valuation bubble. But they also thought, by a 2 to 1 margin, that cap rates will continue to decline this year. That tells me they believe prices will keep on rising, but not for much longer. What do you think? Bubble or no bubble? 

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