Data centers bring mixed housing effects, boost commercial real estate: Report
A new report from the National Association of Realtors found no clear, single effect of data centers on local housing markets, with impacts varying by location. While counties with more data centers tend to have higher home values and job growth, the report did not find direct causation. It did note that residential electricity rates rose more in data center-heavy counties and found a more positive impact on commercial real estate.
The National Association of Realtors (NAR) released a report indicating that data centers do not have a single, clear effect on local housing markets, with impacts varying significantly by location. NAR Chief Economist Lawrence Yun stated that the number of data centers alone is not a predictor of home values, jobs, or utility costs, despite combining national, state, and county-level data with a survey of Realtors.
The report found that counties with higher concentrations of data centers generally exhibit higher home values, incomes, and long-term job growth. However, NAR emphasized that many of these areas were already established tech hubs prior to the data center surge, making it difficult to attribute these trends directly to data centers. Residential electricity rates in counties with 10 or more data centers increased by 21.4% from 2020 to 2024, compared to 15.7% in counties without. Realtors surveyed expressed mixed perceptions regarding residential impacts, with some noting positive effects on home values while others cited negative ones, and client concerns were raised regarding energy and water use.
Conversely, the report identified a clearer positive impact on commercial real estate, with half of surveyed Realtors reporting increased nearby commercial property values and 42% noting increased demand. James Breeze, head of industrial research at CBRE, corroborated this, highlighting data centers' role in driving demand for support manufacturing and third-party logistics, with industrial properties near data centers commanding higher rents. However, Breeze echoed concerns about power availability and competition for workers in areas with data center clusters.