What Housing Markets Will Boom In 2023

Housing sales activity cooled during 2022 thanks to rising mortgage rates and inflation. However, what’s happening is more of a correction as sales activity approaches near pre-pandemic levels in many markets. And, not every market is poised for a dramatic slowdown in 2023. Experts predict that housing markets in many mid-sized cities will remain hot through 2023.

What remains a big question are the median sales prices. Constrained inventory is keeping price growth robust, even if it’s not as dramatic as in the pandemic years.

Affordability is a top concern. For that reason, many of the markets the experts think will be “hot” in 2023 are mid-size markets. It’s in these areas experts expect sales activity and price growth will continue surging in 2023. They weighed factors like economic data and recent sales activity.

According to Danielle Hale, the chief economist for Realtor.com, these mid-sized markets haven’t experienced any massive increases in their real estate prices due to the pandemic, making them much more affordable than other areas of America. Nearly all report sales prices below the US median home price! Their affordability is key to what’s attracting buyers.

What do these hot markets have in common? For starters, they have a robust economy thanks to being located near top employment metros or providing stable employment through the government. They also tend to be inland cities away from highly populated and priced-out coastal areas. Their slow and steady historical sales activity makes them more likely to stay active as the real estate market navigates the uncertainty of 2023.

According to Realtor.com, the top markets for 2023 are:

Hartford-West Hartford, Connecticut

It may be surprising to have a city in the northeast on the list, especially one about 90 minutes southwest of Boston and 2.5 hours northeast of New York City. But that’s the appeal of the state capital. Not only was its housing underpriced before the pandemic, but it offers a quieter, more suburban lifestyle with city access when you want it.

November 2022 median home price: $372,000

Forecasted 2023 combined sales and price change: +15.0%

El Paso, Texas

El Paso is in the middle of a housing boom, with nearly continuous monthly growth since early 2017. The nearby Fort Bliss supports the local economy and ensures a constant in-and-out flow of housing demand.

November 2022 median home price: $290,500

Forecasted 2023 combined sales and price change: +14.3%

Louisville, Kentucky

Straddling the Midwest and the South, the home of the Kentucky Derby is attracting people for its burgeoning manufacturing industry. In 2022, it was one of the areas to see more listings and fewer buyers, but that dynamic means it’s poised for increased buyer interest.

November 2022 median home price: $290,000

Forecasted 2023 combined sales and price change: +13.6%

Worcester, Massachusetts

Home to numerous colleges (eight in total!), Worcester has seen housing prices increase as more people relocate from Boston, just an hour away. The buyers are seeking affordability and convenience, easier to find here compared to a median home in Boston, running $739,900 in 2022.

November 2022 median home price: $447,000

Forecasted 2023 combined sales and price change: +13.1%

Buffalo-Cheektowaga, New York

Often overlooked in favor of its big sister to the south (aka New York City,) Buffalo has seen housing prices increase as more buyers seek out a larger footprint at a price they can afford. Plus, it has a shifting economy with more interest in education and healthcare.

November 2022 median home price: $240,000

Forecasted 2023 combined sales and price change: +12.3%

Augusta, Georgia

The greater Augusta area’s housing market has seen immense growth in the past year. The city is at the crossroads of several major highways. It is a major employment hub for the US Army with nearby Fort Gordon, as well as other federal and state government agencies. Plus, out-of-state buyers are attracted to its outdoor lifestyle, as evidenced by the famous Augusta National Golf Club and Riverwalk along the Savannah River.

November 2022 median home price: $319,000

Forecasted 2023 combined sales and price change: ++11.9%

Grand Rapids, Michigan

The Grand Rapids and the nearby City of Wisconsin housing market have seen a steady increase in housing prices. Located near the east coast of Lake Michigan, people who liked the area for its small city vibe with big city features returned during the pandemic when remote work was made okay. Plus, it has 15 colleges to stabilize the local economy.

November 2022 median home price: $358,000

Forecasted 2023 combined sales and price change: +11.6%

Columbia, South Carolina

Columbia is the perfect mix of economic success and housing affordability, making it a great investment housing market. The nearby Fort Jackson, its status as a state capitol, and the University of South Carolina ensure the market sees constant interest and turnaround.

November 2022 median home price: $300,000

Forecasted 2023 combined sales and price change: +11.3%

Chattanooga, Tennessee

Straddled between Atlanta, Georgia, and Nashville, Tennessee, Chattanooga has become a housing hot spot. It’s the smallest metro on this list, but people love it for its outdoorsy and artsy lifestyle. The Tennessee River runs through the city’s heart, and you can be in the mountains within an hour.

November 2022 median home price: $397,000

Forecasted 2023 combined sales and price change: +11.1%

Toledo, Ohio

Toledo is a midwestern housing market with affordability and convenience. It’s close to the larger cities of Detroit and Cleveland. The city is doubling down on investing in its Metro parks and renovating historic buildings. It is coming into its own as an affordable housing destination.

November 2022 median home price: $161,000

Forecasted 2023 combined sales and price change: +10.9%

2023’s Growing Real Estate Markets

But by no means are these the only markets poised for strong sales activity and price growth, even as the year begins with markets fighting inflation and higher mortgage rates. The National Association of Realtors (NAR) identified a few markets to watch in 2023 based on their housing affordability, available inventory, and strong job markets. The majority of these markets are in the south, with top performers picked as:

• Atlanta–Sandy Springs–Marietta metro area
• Raleigh, NC
• Greenville–Anderson-Mauldin, SC
• Charleston Metro, SC
• Huntsville, AL
• Jacksonville, FL
• Knoxville, FL

So if you’re looking to invest in housing markets in the near future that have strong projected price appreciation and sales activity – these mid-sized cities and metro areas may be a great place to start.