Zillow names Charlotte “2023’s Hottest Market”
Based on factors including: “expected home value growth, projected change in owner-occupied households and job growth compared to new construction”
Those of us in the Charlotte market aren’t at all surprised by Zillow naming us “2023’s Hottest Market”—it just proves what we already know: that “2022 brought a nationwide housing market slowdown, but strong markets like Raleigh and Charlotte continued to see overall growth.”
In the nationwide hot market of 2021, North Carolina housing markets like Raleigh and Charlotte saw significant growth and fierce competition among buyers. In 2022, most U.S. markets saw a measured shift in favor of buyers. However, in some respects, North Carolina cities defied nationwide trends.
Interest Rate Increases
Compared to 2020 and 2021, 2022 saw a spike in interest rates and a decrease in buyer activity as a result. While this slowdown took effect on a national scale, some markets saw a steeper drop than others. In markets like Raleigh and Charlotte, while the buyer competition did decrease a bit, sales volume and home value appreciation remained strong. Even with a small drop in demand due to interest rate increases, areas like the Research Triangle still see more interested buyers than available housing supply.
Sustained Population Growth
A large driver behind the sustained home value appreciation and buyer demand in these North Carolina markets is the sustained population growth brought on by the major universities and thriving industries in the area. From hospitals and research facilities to large tech companies and financial institutions, employment opportunities abound and continue to draw young professionals and experienced professionals alike. This sustained interest in living in North Carolina makes the market more resilient than many other areas.
Heightened Demand for New Construction
One of the most notable trends of the 2022 housing market was the growing proportion of buyers searching for new construction homes. New construction made up a higher portion of home purchases in 2022 than in previous years, and custom home purchases followed a similar trend.
This increased demand for new construction and custom homes falls alongside the rise in interest rates. Engaged buyers see their budgets tested by higher interest rates, and therefore become less willing to invest in renovations and repairs or to settle for a home that isn’t aligned with their lifestyle and priorities.
Additionally, some builders had to scale back on the features and customizations they could offer in 2021 in order to keep up with unprecedented demand. The slight slowdown in 2022 meant that builders were able to catch up and reintroduce their desired level of quality and options, which helped to draw even more interested buyers toward the new construction route.
While supply chains are far from normal, they did see improvements in 2022 that lent themselves to smoother processes and more predictable timelines for buyers and builders alike.
With increased focus on finding the right home as opposed to 2021’s trend of frantically finding any home in order to enter the housing market, a growing portion of buyers are opting to build their own custom homes. By selecting the lot, house plans, and features they truly want and need, buyers make the most of their investment and live the lifestyle of their dreams.
Ready to build your dream home in Raleigh or Charlotte? Get started with Atmos today!
