DIGITAL INSIGHTS: Home Values and Proximity to Data Centers
Do data centers negatively impact home values? While research is just starting to explore this question, early studies suggest they "do not create a drag on value."
By Martin Davis
EDITOR-IN-CHIEF
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Digital Insights is a new weekly feature appearing on Thursdays that explores the role of data centers in our region. These columns will focus on four areas: tracking the development of data centers in our area, exploring projected and actual tax revenue trends, explaining what data centers are and how they affect our daily lives, and reporting on research and emerging trends in the industry. These columns are made possible, in part, by a grant from Stack Infrastructure.
Who would want to live near a data center?
For people whose homes are near data center campuses, or sit near industrial-zoned areas where data centers are looking to build, it’s not an inconsequential question.
Buying a home is the single most important financial decision most families will ever make. In addition, homes are drivers of generational wealth. So as data centers rise in Fredericksburg, Spotsylvania, and Stafford, will these buildings drag down home values?
Homebuyers make purchase decisions based on a wide range of variables. Some variables are highly personal. A home with a pool, for example, may attract a family with kids who swim. That same home, however, might repel a family that doesn’t swim and rightly has a fear of drownings.
Because many people value pools, however, homes that have them usually realize a boost in value, even though some people wouldn’t elect to buy it.
Other factors are known to pull home values down. Proximity to an oil refinery, for example, has been shown to have a negative impact on home values. And why not? Between the smells refineries produce, and the pollution they emit, few people would willingly choose to live next to one.
So what about data centers? Surely there are some who would choose not to live next to one, just as someone wouldn’t choose to live in a house with a swimming pool.
But do data centers in general suppress home values, in the same way that houses situated next to an oil refinery have their values suppressed?
It is possible to answer this question by examining the values of homes situated in close proximities to data centers. A small body of research is beginning to shine a light on this question.
Great Oaks Subdivision and Home Values
In Prince William County, a data center constructed adjacent to the Great Oaks subdivision attracted national attention for excessive noise that created issues for some residents living in the community beginning in 2022.
The controversy was covered by the Washington Post, in addition to local media such as the Prince William Times. It was also one example discussed in a prominent opinion piece for the New York Times.
Amazon, which owns the data center at the center of the controversy, has addressed the problem. The concern, however, hasn’t gone away as Prince William is now considering stricter noise ordinances.
It would likely not surprise, then, that a data center attracting this type of negative attention led to lower home prices in nearby Great Oaks — even with the problem being resolved.
That hasn’t proven to be the case, however.
Numbers compiled by Cushman Wakefield show that sales prices for homes in the Great Oaks subdivision have risen by double-digit percentage points year-over-year since 2019, with the exception of the June-June selling period for 2023-2024 when the average sales price decline by 7% year-over-year.
The following year — from June 2024 to June 2025 — home values climbed sharply in the Great Oaks Subdivision, rising 18% year-over-year. This increase occurred at the same time that the average sales price of all homes in Prince William County declined by 0.36%, according to a report issued by the Prince William Association of REALTORS. (Note: The Cushman Wakefield report is based on the sales price in dollars per square foot, while the PWAR study is based on the total sales price.)
This study is built on a very small sample size, to be sure — just seven homes were sold in the subdivision from June 2023 to June 2024. If data centers were a net drag on home prices, however, it would be reasonable to expect to see that drop in the Great Oaks subdivision across the board. That drop does not show up in this data.
What the Cushman Wakefield study doesn’t explain is why average home sales climbed 18% from June 2024 to June 2025, or dropped 7% over the same period in 2023 to 2024. Given that the sample size is so small, the drop could be due to the particular houses that were sold — perhaps they were older or had other issues. It’s also possible that the extensive coverage of the data center issue during this time temporarily suppressed prices in the subdivision.
A more-complex analysis of of the question is necessary.
No Drag on Home Values
Terry Clower and Keith Waters have developed an interest in the question of home values and data centers. Especially those in close proximity to data centers.
In August, the two produced a study — “Data Centers and 2023 Home Sales in Northern Virginia” — that took a deep dive into the impact that data centers had on home sales in Fairfax, Loudon, and Prince William counties. This study is possibly the most in-depth one of its kind to date. (The Advance worked with SciLine — a nonprofit that works with journalists to identify and interpret scientific research — to surface additional research on this topic and found no additional similar studies.)
With the highest concentration of data centers in the world, Fairfax, Loudon, and Prince William counties are an excellent environment for testing whether data centers have a negative impact on home prices.
This study is particularly valuable because it went far beyond a simple examination of sales prices. Clower and Waters ran analyses on 13 factors that affect home prices. The researchers then made predictions about the impact of these factors on home values, which their data then either verified or contradicted.
Among the factors the researchers considered were:
New homes - predicted to be more valuable than existing homes for sale
Proximity to a Metro station - predicted to add value to a residential property
Proximity to industrial land - predicted that the further a home is from an industrial zone, the greater its value
Proximity to data centers - predicted that being farther away from a data center would make the property more valuable
With two exceptions, the researchers’ 13 predictions held. The most interesting exception was proximity to data centers.
Clower, who teaches at George Mason University’s Schar School of Policy and Government, told the Advance in a phone interview that we “could not establish that there is a persistent negative impact” on home values that are near data centers.
The report summarizes the findings this way:
The analysis fails to demonstrate statistical evidence that proximity to a data center negatively impacts housing values. This suggests that any negative externalities associated with data centers, such as noise, do not have a systemic effect on housing values.
This doesn’t mean, Clower told the Advance, that a data center “is necessarily a positive” on a home’s value, but “it does not create a drag on value.”
In fact, the report stated that “the closer a home was, holding all other variables equal, to a data center, the value was higher.”
Given the newness of this topic, it’s understandable that there are not large numbers of studies on the relationship between home values and data centers. Nonetheless, Clower’s study builds a strong case that data centers are not dragging down home prices. The study itself reports accounting for “87% of the variance in homes observed in Northern Virginia in 2023,” making it a “strong model.”
Still, Clower tells the Advance that people should “always be careful what the data says, and what it doesn’t.” Northern Virginia, he said, “is a different kind of residential market. We have underbuilt housing for so long that there’s so much pent up demand, that might mask affects.”
So there is room for more research on this topic.
But for now, concerns that data centers will make residential properties less valuable or less attractive to buyers doesn’t appear to be the case in Northern Virginia.
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Who is Stack Infrastructure?
Fair question: how much did they grant the Advanvce?
Summarizing the entire Great Oak subdivision's sales price by year doesn't really tell us anything. The community is half-moon shaped, running almost a mile long, with the data centers clustered toward one end. None of the 30 or so homes closest to the data centers has sold in the last three years.
The CRA claims on its website: "The principal mission of the Center for Regional Analysis (CRA) is to provide research and technical assistance to local government and businesses, primarily located in the Washington DC Metro region." Businesses? Which businesses? Paying for which studies? There is no disclosure of funding or conflicts of interest. The website of the Stephen S. Fuller Institute, under which the CRA operates, states: "The Institute is fully funded through January 2020 via private donations. More than 30 donors contributed to funding the Institute, with George Mason University providing office space and overhead costs." Who are these donors?