As data centers spread, not all U.S. housing markets react the same way : NPR

In an aerial view, various data centers are shown situated near a neighborhood on July 17, 2024 in Ashburn, Va. Northern Virginia is home to 319 mapped data centers — about 19% percent of the country’s facilities.

Nathan Howard/Getty Images

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Nathan Howard/Getty Images

As construction of large data centers in the United States continues to accelerate, so, too, have questions about how these massive facilities could affect the housing market.

To help real estate agents address these concerns, the National Association of Realtors commissioned a first-of-its-kind study aimed at evaluating data centers’ impact on the real estate market. The study found that data centers’ effects differ dramatically from place to place.

“We talk about data centers as though they are one category, and they are not,” said Nadia Evangelou, the principal economist and director of real estate studies for the National Association of Realtors.

While some data center-rich counties have shown signs of economic growth, others have experienced strain on their energy supply.

The servers housed in these facilities power all internet functionality — from the growing artificial intelligence industry to basic web searches. As the demand for more computing power has grown amid rapid advances in AI technology, so, too, have these massive warehouses. And many, researchers noted, are being built in and around residential neighborhoods.

The NAR study overlaid several datasets: information about the location and physical footprint of about 1,500 data centers; property values; rates of home sales; demographic data and a survey of more than 2,300 realtors in different regions of the country.

It found that although data center construction has been accelerating, the distribution of these tech hubs is concentrated in just 1% of the country.

“Northern Virginia, Silicon Valley, Phoenix, Central Ohio and Grant County, Washington, are all very different places,” Evangelou said. “They have different economies, they have different markets and different reasons for attracting data centers. So when we look at things like home values, employment, electricity rates, we didn’t find one pattern that can explain all of them.”

Northern Virginia, for example, is home to 319 mapped data centers — about 19% percent of the country’s facilities — while there is a single data center in the entire state of Louisiana, the report noted. Other major hubs include Silicon Valley, central Ohio, central Washington state and south Texas.

Many of the areas where data centers are being built already had stronger-than-average housing markets and higher-than-average income levels, which, researchers said, have not seemed to waver in the presence of data centers.

While the study focused on the impact of already up-and-running facilities, realtors said housing markets begin to feel the presence of data centers long before construction projects are complete.