The hottest housing markets have cooled – but not that much

Photo (c) Thomas Northcut - Getty Images

Experts weigh in on San Francisco, Austin, Nashville, Richmond and Milwaukee

The U.S. housing market started 2023 in a much different place than it did in 2022. Then, home prices were reaching record highs and 3% mortgage rates made them affordable.

Now, mortgage rates are over 6% and home sales have fallen for 11 months in a row. In some markets, prices have fallen but on average, the National Association of Realtors (NAR) reports the median home price went up in December.

To get a gauge of the housing market, you have to look at individual cities and look at prices, time on the market, and how many sellers are cutting the price. We consulted experts with insight into these five markets:

  • San Francisco

  • Austin

  • Nashville

  • Richmond

  • Milwaukee

San Francisco, Austin and Nashville were three of the nation’s hottest housing markets in 2021. Richmond and Milwaukee saw mostly moderate gains in comparison. So where are they now?

San Francisco

Ying He, a Realtor with Barb Co in San Francisco, says the market is facing a “high degree of uncertainty,” in part because of its dependence on Big Tech. She says the recent round of layoffs has hurt buyers’ confidence in the market. But the market has actually gone from overheated to more balanced.

“We had a market correction in the second half of 2022,” He told ConsumerAffairs. “My analysis says by the end of the year, the prices were down about 15% from the peak in spring 2022. Since the New Year, there has been very little inventory on the market. So far in 2023, it looks like we will have low inventories, more moderated prices, and far fewer bidding wars.”

Alex Capozzolo, the co-founder of Brotherly Love Real Estate, agrees that sales have slowed in the San Francisco metro in the last few months and prices have come down by double-digits. Still, he says the median home value in the market is north of $1.5 million while rents have moderated.

“Overall, despite the city's high cost of living rental properties seem to be more viable and could remain so for the foreseeable future,” he told us.


Ari Rastegar, the CEO of the Rastegar Property Company, says Austin is one market that, while perhaps not still on fire, is still pretty hot. He says the presence of two tech giants, Apple and Tesla, is still driving growth.

“So, we're seeing prices begin to come up again, rents on apartments begin to grow again and I think that whatever you see improving on a national level, in Austin it'll be wildly exaggerated in a positive sense as well, and Tesla and Apple really tell that whole story," he said.

Jasen Edwards, chair of the Agent Editorial Board, has a more cautious view of the Austin market. He expects the market will continue to shift toward buyers this year.

“The median home price in Austin has dropped by 3.7% but still reached a new all-time high of $503,000 in December 2022,” Edwards told ConsumerAffairs. “Austin home sales have declined 18.3% compared to the same period last year.”

But he concedes that may simply lead to a more stable market in 2023, with an increase in available homes for sale.


The Nashville housing market was already growing before the Covid pandemic hit. In 2020 and 2021 it was among the nation’s hottest. Joe Hafner, a broker and owner of Hafner Real Estate in Nashville, sent us some interesting data.

In the second half of 2022, closed sales were down 26% compared to 2021, with year-over-year drops of 40% in November and 38% in December. Normally, prices would decline as well, but Hafner said that didn’t happen.

“In the same July to December time window, the median sales price per square foot has actually gone up 14%, including year-over-year rises of 8% in November and 10% in December,” Hafner told us. “Days on the market (DOM) have also been on the rise, averaging 23 days in November 2022 vs. 11 days in November 2021 and 25 days in December 2022 vs. 12 days in December 2021. All of those numbers remain well below the traditional average of 60-90 DOM.”


When markets like Nashville were booming during the pandemic, Richmond’s housing market was moving at a slower pace. The Virginia Association of Realtors says sales slowed in 2022 but prices haven’t given up much ground.

Shri Ganeshram, CEO of Awning, a firm assisting real estate investors around the U.S., says there are very good reason’s why Virginia’s capital has maintained a steady housing market.

“The area's strong economy, low unemployment rate, and proximity to major cities like Washington, D.C. and Baltimore are attracting more buyers to the market,” he told us.


Of the five housing markets, Milwaukee may be the one offering buyers the best opportunity. Midwestern markets tend to be less expensive than California and the Sunbelt. Ganeshram says the recovery from the pandemic has been slow but the market regained some stability last year.

“However, the market still faces challenges from a high unemployment rate and a limited number of affordable housing options,” he said.

That said, money buys more house in Milwaukee. According to Redfin, the median home price in the market last year was $167,000 – 1.5% below 2021 and well below the national average.

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