The Hottest and Coldest Housing Markets in America: Summer 2023
by Joshua Baum, Founder & CEO
The national housing landscape has changed dramatically since early 2022. Back then, a combination of low interest rates, ample remote work opportunities, and an uptick in millennial household formations were driving the demand for single-family homes to record prices. This was especially the case in the Mountain West and Sunbelt markets that experienced massive waves of migration from the costlier coastal markets. Similarly, the apartment rental market was very tight during this time as the historically expensive coastal metros experienced record or near record lows in vacancy rates as young people started returning back to cities.
Since then, the Federal Reserve has aggressively raised interest rates, more companies are returning back to the office, and a slowdown in many regional labor markets are all causing home prices and rents to level off. While there has been no crash, some metros are experiencing some rather large price corrections in response to the change in economic conditions. One such example is Austin, which was red hot early on in the pandemic era. It is highly likely that a resurgence in both the single-family housing and apartment rental market will occur though as many markets are still significantly supply constrained and the demand for housing won’t ever completely fall off.
Using data from Zillow, the remainder of this piece will rank the fastest and slowest growing single-family housing and (mostly apartment) rental markets nationwide over the past year and since the last full month before COVID was declared to be pandemic (February 2020). Additionally, we will rank the most expensive and cheapest housing markets. Please note that we limited the markets to the 100 biggest, according to Zillow.
Single-Family Housing Market
National
The national median sales price for a single-family home stood at $362,667 in June 2023. This represented a year-over-year decrease of 1.5%, significantly lower than the 14.5% gain during the previous June 2021 to June 2022 annual time period. Since the onset of the pandemic era (February 2020) though, home prices are still up 40.4%.
Metros with the Greatest Increase in Prices
The five metropolitan areas that experienced the greatest year-over-year gains in median sales price were the Poughkeespie (46.4%), Wichita (12.2%), Syracuse (10.3%), Rochester (9.7%) and Allentown (9.5%) metros. With the exception of Poughkeepsie, which is in commuting range of New York City and we suspect the data for it might be less than fully accurate as the annual growth rate is off the charts, all of these metros are cheaper than the national median. As interest rate hikes have made a lot of the more expensive coastal metros completely unaffordable to a lot of prospective homeowners, these locations have likely become choice destinations for those looking to purchase their first home.
Metros with the Biggest Price Declines
The five metropolitan areas that saw the biggest decline in home prices year-over-year were the Austin (-15.0%), San Francisco (-11.1%), Las Vegas (-9.7%), Phoenix (-9.4%), and Boise (-9.0%) metros. All of these metros, except for San Francisco, were choice destinations in the early part of pandemic era due to the proliferation of remote work and relative affordability compared to the more expensive coastal markets.
Metros with Fastest Pandemic Era Growth
The five metropolitan areas that experienced the greatest pandemic era (since February 2020) gains in median sales prices were the North Port (79.6%), Tampa (62.7%), Knoxville (60.6%), Durham (60.3%) and Lakeland (59.6%) metros. All five of these metros benefitted from the proliferation of work from home opportunities during the early part of the pandemic and in the case of the Florida metros, had significantly less economic restrictions in place over COVID.
Metros with the Slowest Pandemic Era Growth
The five metropolitan areas that experienced the slowest pandemic era housing price growth were the Des Moines (22.6%), Baltimore (23.7%), (60.6%), Toledo (24.1%) Jackson (25.2%), and Los Angeles (25.7%) metros. All of these markets avoided being choice migration spots during the pandemic era and in the case of Los Angeles, actually saw rather large numbers of out migration.
The Most Expensive Metros
Four out of the five most expensive metros to buy a home were unsurprisingly found in supply-constrained coastal California. The San Jose MSA ($1.58 million) is the most expensive area to buy in followed by the San Francisco ($1.23 million), Urban Honolulu ($916,667), Los Angeles ($894,667), and the San Diego ($854,250) metros.
The Cheapest Metros
The five cheapest metro areas to buy a home were all found in the Rust Belt. The cheapest MSA was Toledo ($172,133) and they were followed by the Akron ($195,433), Dayton ($209,208), Syracuse ($211,600), and Cleveland ($216,333) metros.
Rental Market
National
The Zillow Observed Rent Index (a proxy for median asking rent) nationwide stood at $2,062 per month in July 2023. This represented a year-over-year increase of 3.5%, significantly lower than the 13.3% gain during the previous one year time period, July 2021 to July 2022. Since the onset of the pandemic era, rents nationwide have increased by 26.9%.
Metros with the Greatest Increase in Rents
The five metropolitan areas that experienced the greatest year-over-year gains in rents were the Madison (9.5%), Springfield (8.3%), Akron (7.6%), Fresno (7.4%), and Charleston (7.3%) metros. All of these metros still offer relative affordability (especially compared to the bigger coastal metros) and likely explains why they are still growing so fast in an environment of higher interest rates.
Metros with the Greatest Declines in Rents
The five metropolitan areas that saw the greatest declines in rents year-over-year were the Las Vegas (-2.7%), Austin (-2.1%), Boise (-1.3%), Baton Rouge (-0.3%), and Phoenix (-0.1%) metros. With the exception of Baton Rouge, all of these metros experienced big gains in the earlier part of the pandemic era as work from home opportunities were abound and they were choice destinations for those seeking to move away from the more expensive coastal metros.
Metros with the Fastest Pandemic Era Growth
The five metropolitan areas that have experienced the greatest growth in rents during the pandemic era are the Cape Coral (60.4%), North Port (51.4%), Miami (50.2%), Knoxville (48.5%), and Tampa (46.6%) metros. Four of five of these metros were in Florida, which saw large amounts of migrants moving to the state to enjoy less COVID restrictions and higher levels of affordable housing.
Metros with the Slowest Pandemic Era Growth
The five metropolitan areas that have experienced the slowest growth in rents during the pandemic era have been the San Francisco (5.3%), San Jose (5.7%), Minneapolis (11.0%%), Washington, D.C. (14.0%), and Des Moines (14.9%) metros. The Bay Area dominating this list is noteworthy, but it has been widely reported on as technology companies went fully remote during the early part of the pandemic era and that allowed workers to move away in search of more affordable housing. This had led to the so called Doom Loop and likely also explains why DC is on this list as well. In the case of Des Moines and Minneapolis, theyjust weren’t considered choice destinations during this time despite its affordability.
Most Expensive Metros to Rent
As many would expect, four of the five most expensive metro areas to rent were located in California, but New York ($3,445) has regained its mojo and snagged the number one spot. They were followed by the San Jose ($3,425), San Diego ($3,205), San Francisco ($3,188), and Oxnard ($3,066) MSAs. Just like the single-family housing market, as long as the demand to live throughout California and the New York City region continues to outstrip that of the available supply of housing, we can expect their apartment rents to continue to be among the most expensive in the nation.
Cheapest Metros to Rent
The cheapest metro to rent an apartment in July 2023 was the Wichita ($1,072) MSA and they were followed by the Little Rock ($1,184), McAllen ($1,184), Akron ($1,187), and Toledo ($1,207) metros. Similar to the story of the cheapest single-family housing markets, these locations, despite their high levels of affordability and even an increased level of jobs in recent years, have failed to become choice destinations for those fleeing the pricey coastal metros.
About Hilgard Analytics
Hilgard Analytics is a rising real estate and economic development research firm that specializes in the use of data to guide individuals and organizations through their present challenges and navigate towards a strategically charted future.
In the heart of our organization resides a team of experts skilled in urban planning, economic research, and community engagement. Our proficiencies span across a multitude of sectors encompassing government bodies, private developers, non-profit entities, and community groups.
About the Author
Joshua Baum is a highly respected urban planner with extensive experience analyzing residential and commercial real estate markets, researching climate action strategies, developing economic and workforce development plans, and organizing successful political campaigns. He has made appearances on KPCC (SCPR) 89.3 FM and has been published by Planetizen, the Abundant Housing LA Blog, the Daily Bruin, and Ha’am Jewish Newsmagazine.
Before founding Hilgard Analytics, Joshua worked as a Research Associate at one of California’s most prestigious economic research consulting firms. While attending graduate school, he participated in multiple fellowships such as the Summer Associate program at the Southern California Association of Governments and the Graduate Student Researcher program at the UCLA Lewis Center for Regional Policy Studies. Additionally, Joshua worked on several local political campaigns in Orange County during the 2016 election cycle.
Joshua received a BA in Political Science from UCLA and a M.A. in Urban Planning from the UCLA Luskin School of Public Affairs
