@mirefoot - I will need more details on how you need this to work. Be as specific as possible. I get the general idea but the devil is in the details.
Adding a discrete search engine with parent/children relationships (i.e. Southeast = parent, GA/SC/FL = children) is fairly complex. Likely at least a full week of development ($2500), possibly more.
The other option is you assign each location a tag (or tags) like "Southeast" and put them on the tags pull down list with Pro Pack so the user can select "Southeast", etc.
I might be able to patch something together and fake it with SLP Pro Pack but I will need real data & examples of expected results. That would likely be a full day of customization work @ $500.
If you wish to pursue this contact me at http://www.charlestonsw.com/mindset/contact-us/