Everybody talks about primary, secondary and tertiary markets and so forth. Quite frankly, no one has come up with an exact formula to define them. They’re a little bit fuzzy. Most of us have a sense of what these markets are but the exact definitions are debatable.
So what’s the best rule of thumb? Population of the MSA (metropolitan statistical area, not city).
- A primary market has 5 million or more people.
- A secondary market has 2 million to 5 million people.
- And a tertiary market is under 2 million people.
That said, population doesn’t tell you everything. You have to adjust for the growth outliers. For example, Detroit has a population of more than 5 million, but it’s considered a secondary market because investment activity there is on the low side as the population shrinks. Austin, TX on the other hand, has a population of under 2 million, which would classify it as a tertiary market, but generally the investment activity there is much greater and more emblematic of a larger primary market. Austin is growing fast.
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About Beau Beach, CCIM
Beau is an elite Investment Real Estate Broker, Forbes contributor, author, investor and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.
Beau leads Prowess IRES which specializes in selling investment real estate for the absolute highest price the market will pay…in the Milwaukee, Nashville, Chicago and South Florida markets.
He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.
Beau can be reached by phone, scheduled call or Beau@ProwessIRES.com