AI Talent Drives Real Estate Demand in Major U.S. and Canadian Markets

Artificial intelligence (AI) is changing the world and it’s now significantly reshaping real estate markets as well. Across the U.S. and Canada, demand for tech workers with AI skills has soared, leading to a marked increase in activity in both residential and commercial real estate sectors. According to a CBRE report analyzing LinkedIn data, the number of AI-skilled tech workers has risen by more than 50% from mid-2024 to mid-2025, reaching 517,000 workers in total. This surge in talent is having a profound impact on housing prices, office leasing activity, and overall demand in major tech cities.

Rising Talent Pool and Concentration in Key Cities

The growing pool of AI talent is heavily concentrated in some of the most well-known tech hubs in North America. San Francisco Bay Area, New York City, Seattle, Washington D.C., and Toronto are home to the bulk of AI-skilled workers, with the top three cities alone accounting for 35% of the total in the U.S. and Canada. Among them, New York has seen the largest absolute increase in AI tech workers, adding 20,000 new jobs over the past year.

The growth is not just limited to established tech centers, though. Atlanta, Chicago, Dallas-Fort Worth, and Washington, D.C. have all experienced significant gains, with some cities seeing as much as 75% year-over-year growth in AI talent. Many of these new positions are part of a broader shift, where tech workers are upskilling to handle AI-specific tasks, or entering the workforce with newly acquired AI expertise.

This in-migration of talent is not just an economic trend it’s also reshaping the real estate landscape. As AI talent moves to these key cities, they are not just looking for jobs they’re also seeking places to live. And these cities are feeling the effects.

Impact on Office and Residential Real Estate Markets

The rising demand for AI workers is driving increased demand for both office space and residential rentals. Unlike the trend toward remote work that has affected many sectors of the tech industry, AI companies are still heavily invested in in-office work. In fact, tech companies now account for 17% of total U.S. office leasing activity, up from just 10% in late 2022. This indicates that AI companies are pushing the demand for office space higher, with San Francisco alone seeing AI firms lease one out of every four square feet of office space over the last two and a half years.

As AI firms continue to expand and create jobs, office space demand is climbing, particularly in cities that serve as focal points for this emerging tech revolution. Manhattan, Washington D.C., and San Francisco have all experienced a surge in office leasing by AI companies, signaling that the AI boom is driving a new wave of commercial real estate activity.

But the influence of AI talent doesn’t stop with commercial real estate. The residential market is also benefiting from the influx of high-paying tech workers. According to the CBRE report, apartment rents in major AI tech markets have seen significant increases. From 2021 to 2024, rents in Manhattan rose by more than 14%, Washington D.C. saw a 12% increase, Seattle experienced a 7% rise, and San Francisco saw an increase of nearly 6%.

This surge in rent prices is partly driven by the fact that AI tech salaries are high enough to support the growing costs of living in some of the most expensive markets in the country. For instance, in Manhattan, AI workers are paying only 29% of their income on rent, which is below the typical 30% affordability threshold. In San Francisco and Washington D.C., this number drops even lower, to just 19%, making these cities more accessible for the influx of AI talent.

Financial Impact of AI Talent on Real Estate

While high rents are often a burden for many, AI talent appears well-equipped to handle the increasing costs. With salaries in this field often covering the steep price tags of living in cities like San Francisco and New York, this influx of well-paid workers is contributing to a vibrant rental market. Even as homeownership remains out of reach for many, AI workers can still afford to rent in cities with the highest housing costs, fueling rent price increases.

Furthermore, the presence of AI companies and tech firms in these markets isn’t just benefiting high-end rentals. The demand is creating ripple effects across the entire housing market, contributing to a larger housing boom in cities with a strong tech presence. This is having a significant impact on the local economies as well, as these cities benefit from an influx of wealth and consumer spending associated with the rise of AI.

The Future of AI’s Influence on Real Estate

As artificial intelligence continues to evolve, its impact on real estate markets is expected to grow. Cities like San Francisco, New York, and Seattle are already feeling the effects of AI’s rise, and other cities may follow suit. With financial services, insurance, and real estate sectors also investing heavily in AI talent, the ripple effect on both residential and commercial markets will only continue to intensify.

Colin Yasukochi, executive director of CBRE’s Tech Insights Center, sums it up well: “AI is a fundamental game-changer, and it’s happening now in San Francisco, where OpenAI and other high-profile AI companies are based. The impact of AI talent on real estate is already apparent, and as AI continues to grow, so will its influence on these markets.”

The AI revolution is just beginning, and its effect on housing markets is undeniable. Whether it’s office space or rental housing, the demand for AI-related tech talent is transforming the way people live and work in major cities. For real estate investors, understanding the growth of AI markets and the demand for talent in these cities is crucial for capitalizing on the ongoing tech-driven real estate boom.

As AI continues to shape the future, expect these trends to evolve, with tech cities becoming increasingly central to the economic landscape and driving real estate growth in ways we’ve never seen before. For direct financing consultations or mortgage options for you visit 👉 Nadlan Capital Group.