The Azucena Take: The Rise of Secondary/Tertiary Markets in 2020

The pandemic not only changed how we function in society, but it has also accelerated ongoing trends in the market. Migration from major metropolitan areas to mid-sized and smaller communities has been a growing trend in the last few years that accelerated during the pandemic.

Investors have noticed this trend and are now diverting their interest into the secondary/tertiary markets.

If you are new to real estate investments, then you have a lot of questions and wondering what are tertiary markets? Tertiary markets are the third market classification for metro areas that are defined as having a population of fewer than 1 million people.

Interest in the secondary/tertiary markets had been growing but it spiked when the pandemic hit. Here is a quick break down of how much has changed in these markets:

• Apartments in secondary/tertiary markets spiked to 56% in 2020.

• Retail property in secondary/tertiary markets was up by 68.7% in 2020.

• Office spaces in secondary/tertiary markets grew by 64.7% in 2020.

• Interest in industrial property in secondary/tertiary markets also grew by 62.6% in 2020.

With mass migrations from primary markets to secondary/tertiary markets, investors are just following where the money is going.

So, does this mean that one should avoid investing in major cities? No, because metropolitans like New York or San Francisco have been centers of culture and commerce for generations. People are migrating from these markets but people are also flocking to these locations. Investors need to study the current trends before investing in these markets as they will be rapidly changing.