You might be surprised to learn where the hottest markets are in 2023 with Charlotte, N.C leading the pack according to a new industry report
Yes, Charlotte will be this year’s hottest housing market, according to a Zillow analysis, and Cleveland, Pittsburgh, Dallas, and Nashville join Charlotte in the top five of the Zillow 2023 hottest markets list.
Hot, Hot, Hot
Zillow’s 10 Hottest Housing Markets of 2023
- Kansas City
Unlike in recent years, fast-growing home values are not a requirement for making this year’s list of hottest markets. Higher mortgage rates and severe affordability challenges have chilled demand and brought home values down from last summer’s peak. Home value growth in Charlotte is expected to be much slower this year than its 11.8% pace of 2022, as is the case in all of Zillow’s 2023 hottest markets and the U.S. as a whole.
Charlotte ranks second among large markets in projections for both home value growth and growth in owner-occupied households, which helped shoot it to the top of this year’s hottest markets list. Both Cleveland and Pittsburgh ranked high in projections for time on the market and new jobs per new home built.
There are only four holdovers from last year’s top 10, an indicator of how much the housing market has changed in just one year. Last year’s hottest market, Tampa, just missed the cut this year, coming in at 11. Austin, 2021’s hottest market, has fallen to 29th on the list, in large part because it now ranks among the country’s most expensive large markets. San Jose, Sacramento, Minneapolis–St. Paul, Denver, and San Francisco make up the five coolest large markets in Zillow’s 2023 projections.
While affordability remains a major hurdle, the good news for home buyers is that the cost of a typical mortgage fell in November, thanks to lower mortgage rates. Zillow economists expect affordability to stabilize in 2023, if not improve, making it easier for households to budget and plan for their housing decisions. For those able to buy now, less competition from other buyers means homes are staying on the market longer, many sellers are cutting their list price, and there is less chance of being caught in a bidding war.
Zillow analyzed the 50 largest U.S. metro areas to forecast the hottest, or most competitive, housing markets of 2023. Seven metro areas were excluded due to missing data. The analysis incorporates expected home value appreciation from December 2022 through November 2023, the anticipated change in home value appreciation from 2022, new jobs per new housing unit permitted an estimate of the net unique number of home-owning households based on current demographic trends and the speed at which homes are being sold.