"Over the last week, we've been hearing about rapid absorption of commercial inventories in nearby areas that survived widespread hurricane damage," NAR chief economics David Lereah says. "The greatest demand appears to be in the industrial, multifamily and office markets, but the long-term impact from Hurricane Katrina is uncertain as displaced tenants rethink their future."

Specifics on actual losses in commercial space because of Katrina have yet to be calculated, but the City of New Orleans alone had approximately 18 million sf of office space and 54 million sf of industrial space prior to the hurricane. With regard to the multifamily sector, the real estate organization expects that Houston, Dallas-Fort Worth and Atlanta will experience a marked increase in leasing for the foreseeable future, as no firm timeline as to when redevelopment of the lost properties will be completed has been established. NAR's quarterly spotlight reports rely on data culled by Torto Wheaton Research and Real Capital Analytics on real estate activity in 57 metro markets across the country.