Charlotte will be the hottest housing market in the U.S. in 2023

I spoke with Zillow senior economist Jeff Tucker about what stood out about our city.

• Charlotte is in a sweet spot, Tucker said.
• “It’s a growing city that’s popular to move to, but not too expensive for those looking to get a family-sized home,” he added.

Why it matters: Following the bidding wars and high mortgage rates of 2022, the nation’s housing market is expected to cool down a bit in 2023. With this in mind, Tucker says the data shows Charlotte’s real estate market will still have a prosperous year.

Zillow examined factors such as home value growth, projected change in owner-occupied households and job growth compared to new construction to determine the nation’s hottest markets:

1. Charlotte

2. Cleveland

3. Pittsburgh

4. Dallas

5. Nashville

6. Jacksonville

7. Kansas City

8. Miami

9. Atlanta

10. Philadelphia

The top 10 markets “all boast strong forecasted home value growth, solid economic fundamentals, relatively fast-moving inventory and plentiful likely buyers,” Zillow wrote in its report.

• Charlotte snagged the top spot due to two main factors: forecasted annual home price growth and potential first time buyers, Tucker said. 

By the numbers: Home prices rose 17.5% on average over the last year in Charlotte, per Zillow’s data. “It was a very hot year for the housing market,” Tucker said. “But even by the standards, Charlotte stands out as a place where where home prices really boomed.”

• The high number of projected first-time homeowners in Charlotte also stuck out to Tucker, who says these buyers are fundamental drivers of the housing market.
• Charlotte ranked second, with a projected 6% more homeowner households (just behind Austin, which has a projected 8.1%).

“There’s a lot of folks who look like they’re on the cusp of becoming homeowners in the Charlotte area,” Tucker said. “And recent history shows they’re more successful at making that leap [in Charlotte] than in other places.”

The other side: San Jose, Sacramento, Minneapolis and Denver are expected to be the coolest large housing markets in 2023.

Flashback: In 2022, Charlotte ranked No. 5 on Zillow’s predictions for the hottest housing, which Tucker said came to pass. “That makes me feel good about the methodology because Charlotte was one of the hottest housing markets of 2022.”

The bottom line: Broadly speaking, high mortgage rates will lead to a more balanced real estate market nationwide in 2023. Still, Charlotte’s booming home prices and high number of likely buyers show we’re in good health for the year ahead.

Go deeper: [Here’s what experts say 2023 holds for Charlotte real estate]