Real estate markets can be classified into 3 main types based on the level of activity, availability of properties for sale or rent. These types are the primary market, the secondary market, and the tertiary market.
- Primary Market: The primary real estate market is where new properties are built and sold for the first time. This market is characterized by higher levels of activity, as buyers and sellers are actively seeking properties for sale or rent. This is also known as “developer’s market” as it is where developers invest, build properties and sell them to buyers.
- Secondary Market: The secondary real estate market is where existing properties are bought and sold between owners. This market is characterized by lower levels of activity compared to the primary market, as buyers and sellers are not as actively seeking properties. The secondary market is also known as the “resale market” because properties are typically sold after their initial purchase.
- Tertiary Market: The tertiary real estate market is a smaller and more specialized market that is focused on the rental or leasing of properties. This market includes commercial properties like office buildings, retail spaces, and warehouses. The tertiary market is characterized by low levels of activity, as buyers and sellers are not actively seeking to buy or sell properties. Instead, this market is driven by the demand for rental properties.
In addition to these three main types of real estate markets, there are also subcategories that can further define a market. For example, the luxury real estate market refers to high-end properties that are typically priced above the average market value. The distressed real estate market, on the other hand, refers to properties that are in foreclosure, bankruptcy, or in need of significant repairs.
Understanding different types of real estate markets is crucial for investors, real estate agents, and developers who need to navigate the market and identify opportunities for investment or sale. By analyzing the level of activity and the availability of properties, investors and agents can make informed decisions and develop effective strategies to maximize their return on investment.