The share of US home sales in areas near large data centers has more than doubled since 2018 and is likely grow further amid the rapid infrastructure buildout, News Corp's (NWS, NWSA) Realtor.com said Tuesday.
The share of home sales within five miles of a data center with a capacity of at least 50 megawatts has risen to 1.5% this year from 0.67% eight years ago. That share is projected to expand to 2.3% through next year, according to the online real estate portal.
The number of large data centers operating across the US has reached 347 during the period, up from 49, the report showed.
"The data center buildout has moved fast and it is raising policy, community, and housing-market questions as it spreads and accelerates," Realtor.com Chief Economist Danielle Hale said.
Robust demand for artificial intelligence and cloud services has prompted US technology giants like Amazon.com (AMZN), Meta Platforms (META), Microsoft (MSFT), and Alphabet (GOOG, GOOGL) to continue expanding their data center footprints in the US and globally.
"Our analysis so far offers some reassurance: in the communities we studied, a new data center opening nearby wasn't associated with meaningfully higher or lower home values than similar neighborhoods that didn't get one," Hale said. "But the facilities coming online next are bigger, more remote and landing in communities with less experience managing an industrial neighbor, so that track record may not hold as a guide to what comes next."
The buildout has now been concentrated in areas that are less densely populated and with below-median household incomes, unlike several years ago when data centers largely landed in the cities, the Realtor.com report found.
"The places absorbing this next wave of data centers look different from the places that absorbed the last one," Glen Morgenstern, an economist intern at Realtor.com, said. "They tend to be lower-income, lower-density and farther from a city center, which usually also means fewer resources on hand -- fewer attorneys, less organized civic engagement, and housing markets that react more slowly to new information."
That indicates that those communities "may be less equipped to respond if a facility turns out to be a difficult neighbor," according to Morgenstern.
The average large data center that launched in 2018 drew roughly 24MW of power, with that tally climbing to 60MW by 2026. Electricity and water use are also turning out to be "more visible pressure points," especially in Sun Belt markets already facing water issues, according to the report.
Last month, a Redfin.com survey showed that a majority of US residents object to AI data centers being built near their homes despite the economic benefits of such projects.
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