According to a recent housing market forecast published by Realtor.com, cities like El Paso, Louisville, Buffalo and Grand Rapids could experience the biggest home-price gains during 2023. Those cities are also projected to have an increase in home sales in 2023, with El Paso, Texas leading on that front.
Forecast Predicts Rising Home Prices in 2023
In recent weeks, countless news stories have suggested that the U.S. real estate market is cooling down. And for the most part, that’s accurate. Home sales slowed considerably during the second half of 2022. So we could see a “calmer” housing market in 2023, compared to the frenzy of the past two years.
But home buyers who are hoping to see prices come down significantly might be in for a rude awakening. According to a pair of recent forecasts from researchers at Realtor.com, home prices across the U.S. could continue to trend upward in 2023.
The company’s housing market forecast predicted that sale prices across the U.S. “won’t come down, but growth will moderate to a single-digit yearly pace (+5.4%)…”
Granted, this is just a forecast based on current trends. So we probably shouldn’t take it as gospel. In fact, Realtor.com’s latest prediction contradicts other forecasts that suggest home prices could dip in 2023. A recent forecast from Freddie Mac, for instance, predicted that house values in the U.S. would remain flat next year.
But most of these predictions pertain to the nation as a whole. When you drill down to the local level (i.e., cities and towns), it’s a more complex picture.
The most likely scenario for 2023 is that home prices will keep rising in some cities, while dropping in others. As a result, real estate market predictions can vary from one city to the next.
10 Housing Markets Where Prices Could Rise the Most
On December 7, Realtor published a second housing market forecast that ranked the nation’s 100 largest metro areas based on home price and sales projections. The ten metro areas shown below could stand out next year, in terms of home price and sales growth.
According to Realtor.com Chief Economist Danielle Hale:
“As many households keep a close watch on their spending, we expect these top housing markets to be in relatively high demand. We’ve seen lower price increases, more general affordability and more use of government-backed mortgage products for veterans, first-time and minority buyers in these top markets…”
1. Hartford, Connecticut
Forecasted 2023 combined sales and price change: +15.0%
The Greater Hartford, Connecticut real estate market is expected to see the highest combined growth in home prices and sales during 2023. This forecast suggests that Hartford-area home prices could rise by 8.5% next year, along with a 6.5% increase in total sales. That gives Hartford the strongest real estate market forecast for 2023, among the nation’s 100 largest metros.
2. El Paso, Texas
Forecasted 2023 combined sales and price change: +14.3%
Austin, Texas generated a lot of real estate headlines over the past couple of years. With an influx of buyers from other parts of the country, Austin became one of the hottest housing markets of 2023. But in this latest forecast, another Texas city rose to the top of the list. El Paso is predicted to be one of the strongest markets of 2023, with a projected 5.4% rise in home values and an 8.9% uptick in sales.
3. Louisville, Kentucky
Forecasted 2023 combined sales and price change: +13.6%
The latest Realtor.com forecast predicted that the Louisville, Kentucky metro area would experience an 8.4% increase in home prices next year, along with a 5.2% increase in sales. That puts it at #3 on the list of top housing markets for 2023.
4. Worcester, Massachusetts
Forecasted 2023 combined sales and price change: +13.1%
The Worcester, Massachusetts area could see double-digit price growth next year, if Realtor.com’s market predictions turn out to be accurate. In fact, among the nation’s 100 biggest metros, Worcester was one of only three with a double-digit price forecast for 2023 (the others being Grand Rapids and Portland, Maine). This forecast predicted a 10.6% increase in house values next year, with a slight increase in sales.
5. Buffalo, New York
Forecasted 2023 combined sales and price change: +12.3%
In the Buffalo, New York metro area, home prices are expected to rise by 6% next year, with a similar increase in sales activity. Even so, Buffalo remains one of America’s more affordable housing markets, with a median home value of around $210,000 at the end of 2022 (per Zillow).
6. Augusta, Georgia
Forecasted 2023 combined sales and price change: +11.9%
Augusta, Georgia (and the surrounding area) came in at #6 on the 2023 top housing markets forecast. Augusta is a regional center of medicine, biotechnology, and cyber security, with a healthy job market that attracts residents from elsewhere in the U.S. This helps to sustain home prices by increasing demand. House prices in the Augusta metro area are forecast to rise by 5.7% in 2023, with a 6.2% jump in sales.
7. Grand Rapids, Michigan
Forecasted 2023 combined sales and price change: +11.6%
The real estate market in and around Grand Rapids, Michigan also received a strong forecast for double-digit home price growth in 2023. The company’s analysts expect house values to climb by around 10% during the next year. Home sales, on the other hand, could remain relatively flat by comparison. The Grand Rapids housing market continues to suffer from severe supply shortages, so buying a home there could be a challenge.
8. Columbia, South Carolina
Forecasted 2023 combined sales and price change: +11.3%
With a +7.7% forecast for home sales and a +3.6% prediction for annual price growth, Columbia, South Carolina ranked at #8 among the top markets for 2023. Like other metros on this list, supply shortages continue to challenge buyers in the Columbia area, and that will put upward pressure on prices going forward.
9. Chattanooga, Tennessee
Forecasted 2023 combined sales and price change: +11.1%
The Chattanooga, Tennessee metro area is another real estate market where buyer demand continues to exceed supply. Inventory levels have increased a bit, since the home-buying surge of 2021, but they remain below historical norms. As a result, home prices within the Chattanooga housing market are expected to climb by around 8.2% during 2023, with a 2.9% uptick in sales compared to 2022.
10. Toledo, Ohio
Forecasted 2023 combined sales and price change: +10.9%
Last and least (in terms of home prices), we have the Toledo, Ohio real estate market. This metro area is currently one of the most affordable in the nation. So even though prices are predicted to rise by 6.7% in 2023, buyers shouldn’t fret. Toledo is a good market for first-time buyers in particular, many of whom have smaller budgets when compared to move-up buyers.
Disclaimer: This article includes housing market predictions from third-party sources not associated with the publisher. Real estate and home price forecasts are the equivalent of an educated guess and should be treated as such.