Shaky economy makes planning difficult in the senior housing sector, economist says

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An uncertain economy is making it difficult for investors and operators to anticipate what kind of senior housing will be most in demand as baby boomers age, according to a prominent economist.

“If the stock market continues to have this terrific rally it's had in the last year or so, that creates more wealth, and investors will be looking at higher-end investments,” said Todd Buchholz, director of economic policy under President George H.W. Bush. Buchholz spoke on camera with McKnight's in Chicago, at the recent annual meeting of the National Investment Center for the Seniors Housing & Care Industry. He was one of the featured speakers at an NIC general session titled “ Getting to Growth - A Fiscal and Monetary Policy Debate.”

Boomers will be “more modest in their aspirations” if the stock market stalls or if the fragile economy “sags,” Buchholz said. He does not expect the United States to reenter recession, he added.

Analysts have been eyeing the markets warily in recent weeks, trying to determine how investors will respond to the recent government shutdown and continuing uncertainty over the debt ceiling. Under the deal reached last week to restore government funding, the debt ceiling was raised until Feb. 7. Some worry that this temporary fix will not stoke investor confidence.

In the short-term, the Affordable Care Act might act as a kind of tax hike, according to Buchholz. Consumers purchasing health insurance from the new online marketplaces are not spending that money in retail outlets, he noted.

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