Forget Austin, Texas. These days Waco, a smaller city a few hours to the north, might be the place to be. Or head up from Florida to the Carolinas.
There's a new way to identify the top commercial real estate markets in the U.S. This one comes from the nation's largest residential real estate brokerage association and reveals some notable shifts in where the fastest job and population growth is occurring.
Demand in Florida has cooled as momentum heads up the Atlantic coast to the Carolinas, according to the National Association of Realtors' metric introduced this week. In Texas, growth has moved away from the state capital, Austin, to smaller cities such as Waco, the trade group said. Another notable change is in San Francisco, which is seeing meaningful improvement after a post-pandemic downturn, the index shows.
“To be clear, most of these markets are still growing,” the association's principal economist Nadia Evangelou said in a statement about the index. “People are still moving to Florida. But the momentum that drove these markets to expand a few years ago has slowed, returning to more normal conditions.”
Markets that performed especially well in the index had broad-based growth across multiple economic categories. St. George, Utah, which recorded the highest score in the index in the U.S. in this year’s second quarter, stood out for its office job growth and above-average industrial demand, as well as a rapid population increase.
According to the index, other top performers in recent months were Fayetteville, Arkansas, which outranked the rest of the country in retail demand, and Huntsville, Alabama, which is experiencing a population boom.
Instead of considering vacancy rates, rents and other traditional data, the association created an index that relies on employment and population changes. The index uses data on job growth in the office, retail and industrial sectors from the U.S. Bureau of Labor Statistics and on population growth and net migration from the U.S. Census Bureau. The association assigned an index value of 100 to the average metropolitan area, so a value above that level shows demand is increasing faster than other parts of the country.