#United States #Austin #Data Centers #Realtor.com #Home Sales

The Impact of Data Centers on the American Real Estate Market

In a recent analysis by Realtor.com®, the American home-sale market is experiencing a notable shift as data centers expand their reach in response to where the industry chooses to establish new facilities. Rather than being influenced by potential buyers seeking homes nearer to these tech hubs, the reality is that the data centers themselves are encroaching upon residential areas that are often lower in density and income.

Growth of Data Centers

According to the report, the percentage of U.S. home sales that occur within five miles of a large data center (defined as having a capacity of 50 megawatts or more) has surged significantly, doubling from about 0.67% in 2018 to around 1.5% by 2026. This growth reflects a dramatic increase in the number of operational large data centers across the country, which has risen from 49 to 347 during the same period. Looking forward, projections indicate that this figure could reach 2.3% of all home sales by 2027.

Danielle Hale, the chief economist at Realtor.com®, noted the implications of this rapid buildout: "The expansion of data centers is raising important questions about both local policies and housing markets as it accelerates. Our initial findings suggest that new data center openings have not significantly impacted home values in nearby neighborhoods compared to those that have not seen such developments."

Geographic Changes

The geographical patterns of data centers are evolving as well. New facilities are increasingly situated further away from city centers and closer to communities that are less populated and typically have lower median incomes. For instance, the average distance of data centers from city centers has expanded; by 2027, they are expected to be located about 34 miles from major urban areas, which is significantly farther than previous trends.

The characteristics of the surrounding neighborhoods have also shifted. The typical large data center established in 2026 is now surrounded by about 70% fewer housing units per square mile compared to those built in 2017. This indicates a clear move towards less densely populated areas, which often lack the infrastructure and resources that urban settings typically offer.

Home Values in Flux

One of the core elements examined in the report is the impact that data centers have on home prices. To investigate, the report compared 43 ZIP codes that welcomed a data center between 2019 and 2025 against similar neighborhoods. Findings indicate that home values in neighborhoods with new data centers generally proceeded in line with their counterparts, exhibiting no significant differences in terms of value change.

This stability in housing prices suggests that even as data centers expand, their presence alone does not appear to drive up home prices or affect market dynamics drastically. Furthermore, the report highlighted that housing inventories in areas with new data centers were retained at higher rates compared to similar neighborhoods without such facilities.

Resource Concerns

Despite the stabilizing effect on home prices thus far, the growth of data centers does raise significant concerns regarding local resources. The average power usage of large data centers has nearly doubled from 24 megawatts in 2018 to 60 megawatts by 2026, raising alarms over electricity and water consumption, especially in regions where water scarcity is already an issue.

Efforts by major AI companies to mitigate these concerns are underway, with many pledging to cover costs associated with new power grids rather than passing expenses along to residential customers. However, the challenge remains significant as the shift to lower-income and less densely populated areas may complicate community responses to the potential burden posed by these industrial neighbors.

Conclusion

The findings from the Realtor.com® report signify an ongoing transformation in the intersection between technology and the housing market. As data centers continue to spread into new communities, understanding their implications on real estate dynamics will be pivotal for policymakers and homeowners alike. While initial impacts on home values have remained stable, it remains to be seen how these trends will evolve as the industry continues its rapid expansion.