Data centers' effects on U.S. housing markets differ sharply, NAR study finds

Abilene median home price climbs to $342,000 as Stargate draws workers

The National Association of Realtors released a first-of-its-kind study this week finding that data centers’ effects on U.S. housing markets differ dramatically by region, NPR reported. The study found that while some data center-rich counties have shown signs of economic growth, others have experienced strain on their energy supply.

According to NPR, “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.

The NAR study overlaid several datasets, NPR reported: 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 across different regions of the country.

Although data center construction has accelerated nationally, the study found the distribution of these facilities is concentrated in just 1% of the country. Northern Virginia alone is home to 319 mapped data centers — about 19% of the country’s facilities — while there is a single data center in the entire state of Louisiana, according to the report. Other major hubs include Silicon Valley, central Ohio, central Washington state and south Texas.

“Northern Virginia, Silicon Valley, Phoenix, Central Ohio and Grant County, Washington, are all very different places,” Evangelou said, NPR reported. “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.”

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

Housing markets begin to feel the presence of data centers long before construction is complete, NPR reported. Abilene, a midsized city in western Texas, is experiencing an influx of workers as construction of the Stargate Project — a $500 billion data center set to become the largest in the nation — continues.

Local realtor Steve Stovall said the influx of new residents has created more revenue, which has helped bolster infrastructure and generate a stronger commercial economy, according to NPR. But it has also put such a strain on the residential market that there are not enough homes to keep up with demand.

“It’s not a secret at all that there’s a big data center north of town being built, and buyers that are currently in the market are well aware of it because they’re having trouble finding housing,” Stovall said, NPR reported. “That’s where a lot of our housing shortage has come from: the people who were going to sell have sold. The rentals are full. The hotels are full. Many of the rentals have become Airbnbs or short-term rentals and the prices are all just going up.”

The median home price in Abilene is about $342,000, Stovall said, up from about $250,000 just six years ago.

It’s impossible to know what other impacts the Stargate Project could have on nearby properties before its completion, he said. Though, he added, some longtime residents have already expressed concerns over energy usage and the environment.

Whatever the consequences are for Abilene — good or bad — they are likely to intensify. Two more large data centers have already been approved for construction on the outskirts of town.

Evangelou said the study will need regular revisions to keep up with the pace of data center construction, NPR reported. The National Association of Realtors said it intends to publish an update as soon as six months from now.