Report Finds No ‘data Center Effect’ On National Housing Market Despite Local Fluctuation

The National Association of Realtors has released a new data center report demonstrating minimal correlation between data center sprawl and housing growth.

The negligible impact reflected major clusters for the tech hubs, including in Northern Virginia, where Loudoun and Prince William counties comprise 19% of all data centers nationwide. Other key data center hotspots include Silicon Valley in California, central Ohio, the Phoenix area and central Washington state. 

According to Nadia Evangelou, a principal economist with the association, only 251 counties out of 3,220 nationwide have data centers within their borders, meaning about 92% of American jurisdictions – or 2,971 counties – lack any sort of mapped data center infrastructure, rendering it a very clustered and localized issue.

In terms of concentration, Evangelou said Ohio (63.9 million) has surpassed Virginia (57 million) and Iowa (44.1 million) in total campus square footage. The association evaluated concentration within four core categories.

“We have counties with no data centers [and] we have counties with low concentration, like one to two data centers,” Evangelou told InsideNoVa Monday. “Then, we have medium concentration with three to nine, and then you have the high concentration with 10 and plus facilities, and have in mind that these high concentration counties are only 34 so far from what we have.” 

The top 10 counties with the most data centers encompass 42% of all facilities in the national sector, Evangelou added. Forty-seven of 50 states contain data centers.

Additional findings from the report demonstrate a modest link with employment and uncertain effects on home values.

• Housing markets with large data center clusters have historically been stronger: Median home values are $431,750 in counties with 10-plus data centers versus $174,500 in counties without. Home values in high-concentration counties grew 95% over the past decade compared with 64% in counties without data centers.
• Perceptions of the residential impact were mixed, however, with 25% seeing a positive effect on nearby home values and 22% a negative one. 
• The commercial picture was more clearly positive, the association noted, with 50% reporting increased nearby commercial property values, and 42% reporting increased demand for nearby commercial space, particularly industrial properties and land.
• But the association pointed to stark client concerns, led by energy costs and 61% and water use 56%.
• Residential electricity rates rose 21.4% from 2020 to 2024 in counties with 10 or more data centers compared with 15.7% in counties without.
• Median household income is about $89,000 in counties with 10 or more data centers versus $64,000 in counties without.
• About 41% of adults in counties with 10 or more data centers hold a bachelor’s degree or higher, compared with 22% elsewhere.
• Employment grew about 16% from 2014 to 2024 in counties with 10 or more data centers versus 2% in counties without.
• Real estate firms make up about 6.4% of businesses in counties with 10 or more data centers versus 4.9% in counties with none.

“We don’t see evidence of weaker housing markets in counties with a large data center presence,” Evangelou said. “That doesn’t mean that data centers cause those stronger outcomes. These markets are very different, and many other factors affect housing values and determine where data centers are located. Looking at the demographics, we see that usually the counties with high concentration tend to have higher incomes, higher share of educational attainment, and also younger people that usually bring more demand as well in the areas.”

As for the pitfalls of residential buildout near schools and communities such as those of western Prince William County, Evangelou said the association would tackle those nuances soon in a future study implementing U.S. Department of Energy data and “granular” tracking.

The National Association of Realtors does not presently have a formal policy stance on data centers.

“There is no single data center effect,” Lawrence Yun, the association’s chief economist, said in a statement. “Instead, the story varies significantly depending on the local market. The number of data centers alone does not tell us what will happen to home values, jobs or utility costs.”

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