Fastest Growing Real Estate Markets in 2023

By Michelle Clardie on 01/19/2023
Throughout 2022, we saw a shift in the fastest-growing real estate markets. Cities in Florida, Arizona, and Texas had dominated the housing market for years, but, as interest rates rose and buyers were priced out of these popular markets, those markets started shifting from seller’s markets to buyer’s markets, and new cities emerged as the fastest-growing real estate markets in 2023. 

This list of the fastest-growing markets is based on year-over-year changes in prices and the number of home sales from Realtor.com data, as well as population data from Macrotrends.net.


One important note before we start looking at the hottest markets of 2023: being on the list of fastest-growing real estate markets isn’t necessarily the same as being one of the best cities to invest in real estate. While these fast-growing markets can provide good real estate investment potential, additional factors like inventory, rental rate growth, and rental rates compared to home prices, should be considered before choosing a market in which to invest.

With that, let’s explore the top 10 fastest-growing real estate markets in 2023. 

 
* The year-over-year increase in the median price
** The year-over-year increase in the number of homes sold
*** The year-over-year increase in the population of the metro area
 

1. Hartford, CT


  • Median home list price in November 2022: $372,400
  • Price change in 2023: 8.5%
  • Sales change in 2023: 6.5%
  • Population change in 2023: .59%

Hartford is the state capital of Connecticut and the “Insurance Capital of the World.” With insurance providers like Cigna and Aetna based in Hartford, the jobs market remains strong. And because of the relatively close proximity to both Boston and New York City, Hartford is an attractive option for workers in those cities who have the option to work remotely for at least a few days a week. Home prices are far more affordable in Hartford than in the big New England cities. And the slower pace of life may be more desirable for many buyers as well.    

Long overlooked, the Hartford market had been undervalued before the pandemic. This left lots of room for growth. So, while property values have already been climbing for years, there is still room for additional gains in 2023. As of January 2023, there are no signs that the real estate market is overpriced in Hartford. 

As of November 2022, 46% of Hartford homes were still selling above asking price, indicating strong buyer demand from an influx of new residents.



2. El Paso, TX


  • Median home list price in November 2022: $290,500
  • Price change in 2023: 5.4%
  • Sales change in 2023: 8.9%
  • Population change in 2023: 1.13%

With home values surging in large Texas cities like Dallas, Austin, and Houston, El Paso is now the destination of choice for price-conscious buyers looking for a Texan metro area. 

El Paso is located on the western edge of Texas, bordering Mexico. Home to Army base, Fort Bliss, El Paso attracts many buyers from outside of the area. Both service members and contractors are drawn to the opportunities available in El Paso.    

Because so many buyers are military service members, qualified spouses, and veterans, VA loans make up a large share of home financing, with an estimated 24% of buyers using VA loans. Another 40% purchase with all-cash.

Between the cash offers and the impressive population growth over the last year, buyer competition can be tough, particularly in the busy spring season. In June 2022, for example, the average home sold for 2.5% over asking. If you’re planning to buy in El Paso, bring your highest and best offer.    

3. Louisville, KY


  • Median home list price in November 2022: $290,000
  • Price change in 2023: 8.4%
  • Sales change in 2023: 5.2%
  • Population change in 2023: .81%

Louisville, positioned just south of the Indiana border, is Kentucky’s largest city with a population of 1.12 million. Made world-famous as the host of the Kentucky Derby, the city has worked to establish itself as a manufacturing center over the last several years. 

These new manufacturing jobs have incentivized workers to relocate to Louisville, resulting in a substantial population increase. And with affordable homes still to be found there, Louisville can be a contender for buyers looking to get into the housing market with a low initial investment.  

4. Worcester, MA


  • Median home list price in November 2022: $447,500
  • Price change in 2023: 10.6%
  • Sales change in 2023: 2.5%
  • Population change in 2023: .90%

The most expensive city on our list of the fastest-growing real estate markets belongs to Worcester, Massachusetts. With a median listing price near $450,000, Worcester is pricey by some standards, but it is still a bargain compared to Boston, which is the largest metro area. As the median home price in Boston sits at $739,900, many people who work in the Boston area are willing to take the hour-long commute to get more affordable housing in Worcester.

Even during the slower winter months, homes are selling for around 1.6% above asking. And they’re selling in just 20 days on average. So if you plan to buy in Worcester, be ready to act quickly with a strong offer. 

5. Buffalo, NY


  • Median home list price in November 2022: $239,000
  • Price change in 2023: 6%
  • Sales change in 2023: 6.3%
  • Population change in 2023: 0%

A short drive from Niagra Falls, Rochester, and Toronto, Buffalo is well-positioned to serve as home base for workers all over Western New York state. Sitting on the northeast corner of Lake Erie, Buffalo boasts picturesque areas with waterfront views, at comparatively affordable prices. 

Buffalo is in the midst of a comeback after suffering heavy job losses due to manufacturing plant closures. While the city didn’t add new residents in 2022, it critically didn’t lose any. Major players in the insurance, banking, and gaming industries have set up shop in Buffalo and brought fresh life to the city, providing jobs for the locals, and likely attracting new talent in the coming years.

Just make sure you like snow before buying in Buffalo. With an average of 95.4 inches of snow per year, Buffalo is one of the snowiest cities in America!



6. Augusta, GA


  • Median home list price in November 2022: $318,900
  • Price change in 2023: 5.7%
  • Sales change in 2023: 6.2%
  • Population change in 2023: .88%

Augusta, Georgia is positioned on the border of South Carolina, about two hours east of Atlanta and 2.5 hours north of Savannah. Home of Fort Gordon and the U.S. Army Cyber Center of Excellence, Augusta enjoys a solid jobs market as well as reasonable home prices.  

As with El Paso, Texas, the strong military presence in Augusta means lots of VA loans are used for home financing. Also like El Paso, the low home prices mean lots of cash buyers. Around 36% of transactions in Augusta are cash deals. 

Georgia’s cost of living is among the lowest in the country, with a state COL index of just 88.9. So if you’re looking for an ultra-affordable option, Augusta might be a good fit for you. 

7. Grand Rapids, MI


  • Median home list price in November 2022: $358,300
  • Price change in 2023: 10%
  • Sales change in 2023: 1.6%
  • Population change in 2023: .50%

Grand Rapids is a cool Midwestern brewery town of just under 200,000 residents. Located around 30 miles inland from lake Michigan, the population of Grand Rapids had stalled from 2000 until 2020. But then with the pandemic and the increased availability of working remotely, interest in this town picked up. Some attribute the increasing population, at least in part, to college-educated locals returning to the area after having moved away for work in the pre-pandemic years. 

With double-digit percentage changes in home prices from 2022 to 2023, some locals are now being priced out of the market, particularly as mortgage rates have risen. This has decreased demand from first-time buyers, while demand from investors remains high. 

8. Columbia, SC


  • Median home list price in November 2022: $300,400
  • Price change in 2023: 3.6%
  • Sales change in 2023: 7.7%
  • Population change in 2023: 1.60%

Columbia, the state capital located in the heart of South Carolina, has a lot going for it. With the University of South Carolina and the military training base at Fort Jackson bringing new residents to the area, the population exploded by 1.6% from 2022 to 2023. 

The university and the base attract both experienced staff and new recruits. So there’s a wide range of demand, from Veterans using their VA benefits to purchase a family home (around 14.5% of purchases are made with VA loans) to graduates who use FHA loans to purchase starter homes (around 15.8% of deals are financed with FHA loans). This means that investors with all-cash offers can gain a competitive edge over these more complicated methods of financing.



9. Chattanooga, TN


  • Median home list price in November 2022: $396,500
  • Price change in 2023: 8.2%
  • Sales change in 2023: 2.9%
  • Population change in 2023: .94%

About two hours southeast of Nashville, Chattanooga, Tennessee sits directly on the Alabama border. While this metro area has a comparatively small population of under 500,000, it has seen population growth of near 1% in a single year.

As one of only eight states without a personal income tax, Tennessee has gained traction in the work-from-home era as an alternative to high-state-income-tax states. And while big cities like Nashville and Memphis have become unaffordable for many buyers, Chattanooga still offers large homes at reasonable home prices.



10. Toledo, OH


  • Median home list price in November 2022: $161,100
  • Price change in 2023: 6.7%
  • Sales change in 2023: 4.2%
  • Population change in 2023: .39%

A hearty Midwestern manufacturing town, Toledo, Ohio is the most affordable housing market on our list of the fastest-growing real estate markets in 2023. Located at the western tip of Lake Erie, Toledo is a quick hour's drive from Detroit, Michigan, and less than two hours from nearby Cleveland, Ohio. 

Investors can still find properties in the $50,000-$150,000 range. But the low home prices mean more buyers are willing and able to pay all cash. With an estimated 35% of transactions using cash only, Toledo real estate investors should expect to compete with all-cash offers, particularly in the high-demand, low-price-point niche. 

Is Los Angeles a Fast-Growing Market?


As a Beverly Hills-based real estate investment firm, the experts here at Gatsby Investment take a special interest in the Los Angeles housing market as one of the best places to invest in southern California. And we often get questions about how LA compares to other real estate markets. For example: is Los Angeles among the fastest-growing real estate markets in 2023?  

Los Angeles, as a whole, might not make the top 10 list of the fastest-growing housing markets. But population growth was a respectable .37% from 2022 to 2023. And the median sales price is currently up 3.4% year-over-year. The real strength of the LA market, however, lies in specific investment strategies.

Take single-family home flips, for example. In many markets, profits have become razor-thin as after-repair values dip. But because of a unique zoning law change, California property owners can add an ADU (accessory dwelling unit) to their lots, effectively creating a second dwelling on a single-family lot, and substantially raising the property value!

Or take multi-family rentals as another example. By developing units specifically for co-living households with multiple roommates, real estate investors can capitalize on under-served demographics, thereby boosting rental rates and returns, particularly during periods of inflation as we’ve seen in 2022. 

Los Angeles is a fast-growing market. But knowing how to strategically invest in this sprawling market is the secret to enjoying above-average returns.




Invest in Los Angeles Real Estate with Gatsby Investment


Gatsby Investment has helped thousands of investors (including out-of-state investors) capitalize on the unique Los Angeles real estate market, and we’re accepting new investors for 2023. 

Whether you have $10,000 or $100,000 to invest in real estate, we have options to work with your investment budget. Whether you’re looking for short-term profits or long-term gains, we have opportunities that work with your timeframe.    

Explore your investment options today, and learn more about how Gatsby averages double-digit annualized returns for our investors!


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