A Zillow analysis predicts Charlotte will be this year’s hottest housing market.
“The desire to move hasn’t changed, but both buyers and sellers are frozen in place by higher mortgage rates, slowing the housing market to a crawl. Markets that offer relative affordability and room to grow are poised to stand out, especially given the prevalence of remote work,” said Anushna Prakash, a Zillow economic data analyst, in a press release.
The good news for buyers, she said, is that monthly housing costs have stopped climbing. “Home shoppers who can overcome affordability hurdles will find a more comfortable market this year, with more time to consider options and less chance of a bidding war, even if they’re shopping in one of the hottest markets,” she added.
Relatively affordable metro areas dominated the list. Following Charlotte were Cleveland and Pittsburgh.
The complete list included:
1. Charlotte
2. Cleveland
3. Pittsburgh
4. Dallas
5. Nashville
6. Jacksonville
7. Kansas City
8. Miami
9. Atlanta
10. Philadelphia
Even in Charlotte, the hottest market, home value growth is expected to be much slower than the 11.8% increase in 2022, Zillow said. In fact, in all the hottest markets and the U.S. as a whole, home-value growth is slowing down.
Many of the metro areas that were on the top 10 last year didn’t make it to this year’s list because they are now so expensive. For example, Austin, which was the top market in 2022, fell all the way to No. 29 this year, mainly because it now ranks among the country’s most expensive housing markets.
“San Jose, Sacramento, Minneapolis–St. Paul, Denver and San Francisco make up the five coolest large markets in Zillow’s 2023 projections,” the release said.
Zillow analyzed the 50 largest U.S. metro areas to come up with its 2023 list. 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 new number of home-owning households based on current demographic trends, and the speed at which homes are being sold.
