Both buyers and sellers can anticipate a frenzy of activity this year in the housing market. In this article, we are going to list the top 10 hottest housing markets in 2023 by Zillow and Realtor.com. Discover the top 10 hottest housing markets in 2023 in this comprehensive article. Stay ahead of the game as a buyer or seller by exploring the leading real estate trends that are driving these booming markets. Get an in-depth analysis of the factors contributing to these markets' growth and what it means for you. Start your journey to finding the perfect real estate opportunity today.
10 Hottest Housing Markets in 2023
Zillow has predicted the most promising housing markets of 2023 based on various factors including expected home value growth, changes in homeowner households, and job growth compared to new construction. The Midwest has become a competitor to the previously dominant Sun Belt, with Charlotte, Cleveland, and Pittsburgh leading this year's list.
- Kansas City
Last year's hottest market, Tampa, has dropped out of the top 10. On the other hand, San Jose, Sacramento, Minneapolis, and Denver are expected to be the coolest large housing markets in 2023. The housing market is predicted to cool down this year, due to the high cost of mortgage payments. However, the impact on the nation's largest markets will vary.
Charlotte is expected to be the hottest housing market in 2023, followed by Cleveland, Pittsburgh, Dallas, and Nashville.
Zillow's list is based on analyses of forecasted home value growth, recent housing market activity, and expected changes in the labor market, home construction, and homeowner households. Charlotte's forecasted annual home price growth, Cleveland's high market activity, and Pittsburgh's ratio of jobs per new home permitted were key factors in pushing them to the top of the list.
The expected coolest markets are San Jose, Sacramento, Minneapolis, and Denver. Each of these markets is characterized by expected annual home value decreases and slower housing market activity. Price growth, inventory and velocity, and demographics have all played a role in determining the hottest housing markets of 2023.
Despite the predicted slowdown in price growth in some of the fastest-growing markets of 2022, the markets with the highest demand in 2022 are expected to have relatively elevated demand this year. Austin, Charlotte, and Jacksonville are the markets with the most demographic lift in the for-sale market, while San Jose, San Francisco, and Milwaukee have the most negative demographic pressure.
Methodology Used by Zillow
The final index was based on the following data:
- Forecasted annual home value appreciation in Nov. 2023
- Forecasted acceleration in home value appreciation, Nov. 2022 – Nov. 2023
- Standardized listing days per home, Jan. 2022 – Dec. 2022
- 2-year change in total non-farm employment per 2-year residential building permit total
- Projected change in owner households, 2022 – 2023
10 Hottest Housing Markets for First-Time Homebuyers in 2023
The 2023 housing market remains a challenge for first-time homebuyers, with rising mortgage interest rates making homeownership difficult for many. However, some cities offer a more favorable environment for first-time buyers, with affordable prices, ample housing options, and livable conditions. Realtor.com's economics team has identified the top 10 real estate markets for first-time homebuyers this year.
Over half of these markets are located in the Northeast and offer a balance of affordability, livability, and proximity to urban areas with job opportunities and recreational options. These markets appeal to young professionals seeking to establish their careers, with favorable local employment and good social amenities. The list was compiled based on factors such as the number of 25-34 year-olds, average commute times, unemployment rates, number of homes for sale, affordability, food and drink establishments, and forecasted sales and price growth.
The top 10 markets for first-time buyers in 2023 are:
1. Portsmouth, VA
Median home list price: $239,000
Metro: Virginia Beach, VA
Portsmouth, a historic seaport city in Virginia, has been named the best place for first-time homebuyers by the Realtor.com® economics team. The city moved up from fifth place last year and is popular due to its affordability for the desirable Hampton Roads region. Portsmouth has a population of about 100,000 with a strong employment market, including many military jobs, due to its naval medical center and Coast Guard base, as well as an international port and shipyards.
The city also has a vibrant Olde Towne section of downtown with restaurants, wine bars, shops, and a children's museum. Properties for sale in the city are mostly single-family homes, with a good variety of price points, including million-dollar-plus homes along waterways. A three-bedroom, 2.5-bath Colonial is currently on the market for just over $300,000, with the seller offering to help cover closing costs for those who pay full price.
2. DeForest, WI
Median home list price: $389,900
Metro: Madison, WI
DeForest, WI has been named the second best place for first-time homebuyers by the Realtor.com® economics team. DeForest, a small town located on the Yahara River and 30 minutes southwest of Madison, has become a desirable location for those looking for homes within commuting distance.
The town is known for its giant, pink elephant sculpture outside a local gas station, Elenbach’s Cheese Chalet which sells over 400 varieties of Wisconsin-made cheeses, and its annual Dragon Art Fair & Silent Auction event. DeForest offers a variety of housing options, including condos, townhomes, and single family homes, with most of the listings being for land in newly planned communities. The typical third of an acre parcel for new construction is priced around $125,000.
3. Windsor Locks, CT
Median home list price: $239,900
Metro: Hartford, CT
The Hartford metro area is also among the top real estate markets for 2023 according to Realtor.com and its surrounding suburbs, such as Windsor Locks, are also seeing a rise in real estate activity. Windsor Locks, home to the Bradley International Airport and the New England Air Museum, offers older single-family homes with a size of 1,700-2,200 sqft on a quarter-acre lot for $250,000-$400,000, as well as condos and new constructions.
Many buyers moving to the area are coming from Boston and New York City seeking a quieter and more affordable place to raise families, and the area has seen a rise in tech companies and young people. The area is also close to both New York City and Boston, within 2 hours' driving distance in either direction.
4. Gloucester City, NJ
Median home list price: $160,000
Metro: Philadelphia, PA
Gloucester is a historic blue-collar town in New Jersey with a median home list price of $160,000. It is located across the Delaware River from Philadelphia and is the cheapest city in New Jersey. The median list price in Philadelphia metro is around $272,000. The town has a mix of single-family homes and townhomes, most of which are priced below $175,000. A five-bedroom, one-bathroom Colonial with a large backyard is on the market for about $250,000.
5. Moore, OK
Median home list price: $220,000
Metro: Oklahoma City, OK
Moore, a suburb located 15 minutes south of Oklahoma City, is known for its variety of recreational activities and has a young population with 17% of the population being between 25 and 34 years old. However, Moore is located in Tornado Alley and experienced deadly tornadoes in 1999 and 2013, killing dozens of people. There is a mix of new construction and older single-family homes in Moore, with most of the newly built homes listed for around $300,000. The median home list price in the Oklahoma City metro area is $220,000.
6. Magna, UT
Median home list price: $410,000
Metro: Salt Lake City, UT
Magna, a suburb of Salt Lake City, has fallen from its position as the top destination for first-time homebuyers but still scores high due to its affordability compared to Salt Lake City and a relatively high number of homes for sale. The city has undergone a renaissance in recent years as first-time homebuyers and older buyers seeking cheaper homes have relocated. New communities of townhomes and single-family homes have been built in response.
The majority of homes for sale in Magna are new construction, with three-bedroom, 2.5-bathroom homes for around $500,000 and four-bedroom, 2.5-bathroom townhomes for around $400,000. There are also mobile homes available for as low as $40,000. The city is close to the airport, city, good interstate access, and ski resorts. The majority of buyers are young couples planning for families.
7. Eggertsville, NY
Median home list price: $230,800
Metro: Buffalo, NY
Eggertsville is a suburb of Buffalo, NY, located 15 minutes away from the city near the Canadian border. The real estate prices in Eggertsville are expected to grow by 6% and sales to rise by 6.3% in 2023, according to Realtor.com. Most of the properties available in Eggertsville are single-family homes with a median home list price of $230,800. Affordable options include a four-bedroom, two-bathroom home built in the 1940s for about $175,000 and high-end properties like a 4,500-square-foot brick home with an in-ground heated pool for roughly $700,000.
8. Watervliet, NY
Median home list price: $228,300
Metro: Albany, NY
Watervliet, a suburb of Albany, NY, is known as the “Arsenal City” due to its history as a site for manufacturing cannons during the War of 1812. The city features Hudson Shores Park, which has been revitalized to host a farmers market, live music, and events. The housing stock in Watervliet is mainly made up of single-family and multi-family homes. A two-family house with three bedrooms and one bathroom in each unit and a fenced yard is available for $250,000 and a three-bedroom, 1.5-bathroom house with a walk-up attic is available for $200,000.
9. Mattydale, NY
Median home list price: $128,900
Metro: Syracuse, NY
Mattyvale is a small rural suburb located near Onondaga Lake in Syracuse, New York. It is notable for being the former home of L. Frank Baum, the writer of “The Wonderful Wizard of Oz”. The town offers amenities such as movie theaters, restaurants, and bars, and is located near the Syracuse Hancock International Airport.
The majority of homes for sale in Mattyvale are single-family homes priced below $150,000, with a median home list price of $128,900. An example of a typical home for sale in Mattyvale is a three-bedroom, 1.5-bathroom home with an area of about 1,600 square feet, priced at $145,000.
10. Somersworth, NH
Median home list price: $329,900
Metro: Boston, MA
Somersworth is a city located about half an hour northwest of Portsmouth, NH, and two hours north of Boston. It is a desirable area due to its proximity to the Seacoast of New Hampshire and the presence of a research hub, the Pease Tradeport Portsmouth, which was once an Air Force base.
Real estate prices in Somersworth are relatively affordable compared to other nearby communities, with a median home list price of $329,900. The real estate market in Somersworth is still active, with mostly single-family and mobile homes for sale. A brand-new two-bedroom, two-bathroom manufactured home can be purchased for under $175,000, while a 3,500-square-foot house on over 5 acres can cost $915,000.