South Carolina ranks highest among all U.S. states for future potential demand in commercial real estate, according to a new index from the National Association of Realtors. The NAR’s index, designed to act as a forecasting tool for investors, evaluates economic conditions across more than 300 metropolitan markets and produces separate scores for office, industrial, retail, and multifamily sectors.
The index relies on government data from the Bureau of Labor Statistics and the Census Bureau, incorporating population and migration figures. For the office sector, the NAR tracks growth in professional and business services employment. Industrial demand is measured by employment growth in manufacturing, transportation, and warehousing. Retail uses growth in retail trade, leisure, and hospitality jobs, while multifamily factors in population growth and net migration, both domestic and international. These components are combined into a single score for each market.
Broader momentum in smaller markets
Nadia Evangelou, NAR’s principal economist and director of real estate research, said the index is not a directive to buy specific properties but rather a signal of where demand is building. “It doesn’t say, ‘OK, go there and just buy property,’ but it says … where the data shows that the momentum is building, the demand is building,” she said.
The index compares current conditions to 2022, which marked the peak of the pandemic-era migration boom. Only one major U.S. market — Raleigh, North Carolina — is stronger today than it was then. Formerly hot markets such as Austin, Texas, Miami, and Naples, Florida, have all declined significantly since 2022.
St. George, Utah, takes the top spot among all metro areas in the index, driven by the nation’s strongest office employment growth. “It also has very strong population growth and in-migration, and its industrial demand is above average,” Evangelou said. “So St. George, for example, is the No. 1, because one industry happened to have a good year, so there is a broader momentum over there.”
Opportunities beyond big cities
While many existing indexes concentrate on the largest metropolitan areas, Evangelou noted that small and midsized markets may offer some of the best investment opportunities. She highlighted Fayetteville, Arkansas; Huntsville, Alabama; and Spartanburg, South Carolina as examples. Fayetteville is seeing broad-based growth, while Huntsville has one of the strongest multifamily scores in the nation, she said.
The index also breaks down sector-specific leaders: Salem, Oregon, and Fairbanks, Alaska, rank highest for industrial demand.
Evangelou pointed out that large coastal markets continue to lag. “When we take a look at New York, San Francisco and the big coastal markets, we see that the large markets are still generally weaker than the fast-growing Sunbelt and smaller markets in this index,” she said.
Source: www.cnbc.com — https://www.cnbc.com/2026/08/20/commercial-real-estate-demand-nar-data.html
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