10 Hottest Housing Markets of 2023, and What to Know if You’re Shopping in One

Zillow’s list of the 10 hottest housing markets for 2023 features notably fewer Sun Belt cities, like Phoenix and Tampa, than last year’s edition. And weather isn’t the only thing cooler about these places.

“This year’s hottest markets will feel much chillier than they did a year ago,” says Anushna Prakash, economic data analyst at Zillow. “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.”

Zillow researchers ranked 2023’s hottest markets based on strong forecasted home value growth, relatively fast-moving inventory and plentiful likely buyers. This means even given the overall chill in the national housing market, buyers in these areas will likely encounter substantial demand for desirable homes.

“Markets that offer relative affordability and room to grow are poised to stand out,” says Prakash. “Especially given the prevalence of remote work.”

What makes these markets 'hot'?

Even the fastest-growing markets of 2022 are expected to see significant slowdowns in the year to come. But 2023’s hottest markets are still expected to see relatively strong growth, as well as solid economic fundamentals. Similarly, buyers in these markets can expect to see homes on the market for fewer days than in the coolest markets, like San Francisco.

Another factor in certain markets here is an expected rise in the number of owner-occupied households — partly a result of demand from both baby boomers and millennials. Both are enormous generations, and both are very active in the housing market, says Prakash.

The 10 hottest housing markets

10. Philadelphia

Pennsylvania’s largest city is home to historical landmarks like the Liberty Bell, Independence Hall, and that scene from Rocky. Another locale to climb into the top 10 from last year, Philadelphia saw home prices also climb 7% year-over-year (YOY) from 2022. The median December sale price for a home in this market was $310,000.

9. Atlanta

Known for its rich civil rights history and vibrant hip-hop scene, among other things, Atlanta fell from last year’s spot at number six on this list. Home prices may have just peaked in “Hotlanta,” which saw the Zillow Home Value Index rise 6.1% year-over-year since last January, but fall 0.4% month-over-month in December. Compared to fast-moving markets such as Kansas City, homes on the Atlanta market took a leisurely 36 days to go pending in December.

8. Miami

Miami boasts pristine beaches, the massive Everglades National Park, and a rich Cuban cultural influence. The city has seen only very slight home value declines in the past year, with prices even rising in some recent months, earning it eighth place on this list. In December of 2022, (the last month that numbers were available), the median home sale price in the Miami-Fort Lauderdale metropolitan area was $410,000.

7. Kansas City

As recently as December of 2022 (the last month that numbers were available) homes in this metropolitan area typically went pending after 14 days on market. That’s less than half the days it took before the pandemic. The market here is representative of an overall 2023 Midwest surge that also features its suburb, Prairie Village, and nearby Wichita, Kansas, among other regional hotspots. Buyers here can expect to enjoy sociable neighbors, world-class barbecue, and winning football teams.

6. Jacksonville

Jacksonville, Florida, has seen a slowdown since last year, but it still lands at number six on our list of hottest housing markets. A beach lover’s paradise that boasts 22 miles of white, sandy shores and 1,100 miles of navigable water, Jacksonville (known as “Jax” by residents) averages 270 days of sunshine per year. It’s also the youngest city in Florida, with an average age of 36. That may help explain why Jacksonville is expected to experience a significant rise in the number of owner-occupied households.

5. Nashville

Music City had 6.4% annual home value growth over 2022, but is forecasted to drop to eleventh place for home-value growth this year. Home to country music mecca the Grand Ole Opry, Nashville is known for its flush music history. More than 180 performance venues keep that history alive today. A steady for-sale favorite in recent years, Nashville climbed one spot from last year.

4. Dallas

Known for its high concentration of restaurants, shopping centers, and its designation as the birthplace of the frozen margarita machine, Dallas is the westernmost market on this list. Dallas features a humid, subtropical climate with hot summers. The metro area saw new listings drop 33% from pre-pandemic levels, as of January 2023. Shoppers here may do best to stay on top of listings. Popular homes will still go fast. 

3. Pittsburgh

The Steel City is recasting itself as a technology hub, emphasizing industries like life sciences, healthcare, business services, and computer science. Meanwhile, persistent affordability has helped the city become one of the country's hottest housing markets. In 2022, Pittsburgh buyers could expect to typically spend about 25% of their income on monthly mortgage payments — well under the 30% threshold at which homeowners can begin to feel house-burdened. The market also ranked high in projections for time on market and new jobs per new home built. Interestingly, Pittsburgh saw only a slight dip in December home sales when compared to pre-pandemic numbers (1,800 versus 2,300 pre-pandemic). 

2. Cleveland

Cleveland soared from outside 2022’s top 10 to land in second place this year. Like Pittsburgh, Cleveland ranked high in projections for time on market and new jobs per new home built. Parked at the shore of Lake Erie and split in two by the Cuyahoga River, Cleveland is also home to major sports teams the Cavaliers (basketball), the Guardians (baseball) and the Browns (football). Other attractions include the Rock & Roll Hall of Fame and the house from the movie 'A Christmas Story.'

1. Charlotte

Charlotte, a 211-mile drive from the sands of the Atlantic Ocean, nabbed the top spot on our list of the hottest housing markets for 2023 due to its forecasted annual home price growth. While considered the hottest market, activity may be less than what buyers and sellers saw in Tampa last year, says Prakash. Jumping from number five in 2022, the Queen City ranks second among large markets in projections for both home value growth and growth in owner-occupied households.

Charlotte is a major banking hub, but as home to both the NASCAR Hall of Fame and the Charlotte Motor Speedway, it’s also big on NASCAR. Sports fans can cheer (or jeer) the Charlotte Hornets (basketball) and the Carolina Panthers (football). Much like in several other places on this list, barbecue is also a draw. The temperate climate makes getting outdoors a breeze year-round, and the area boasts anything from whitewater rafting at the U.S. National Whitewater Center to the Daniel Stowe Botanical Garden for those who want something a little more soothing.

What are the coolest markets?

San Jose, Sacramento, Minneapolis–St. Paul, Denver and San Francisco make up the five coolest large markets in Zillow's 2023 projections. Demand has cooled in these markets and home values are falling. Prices were 4.9% lower than last January in San Francisco, for example, and 2.6% lower in Sacramento. San Jose and San Francisco are also seeing negative demographic pressure, opposite the situation in some of the markets on 2023’s hottest list. 

What do I need to know if I’m buying in a hot market?

Even this year's hottest markets areas are likely to feel calmer than those of the last few years, says Prakash. “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.”

Should your area unexpectedly heat up, though, try these home buyer tips for a fast-changing market. You can also set yourself up for success by making sure your finances are in order. As always, it’s best to work with an experienced real estate agent. And if things get heavy, check out this advice on how to manage the stress of buying a home.