Investors Have Been Moving Into Secondary Markets

Investors have been moving into secondary markets such as Dallas and Minneapolis amid growing confidence in the recovery and soaring prices that drove down yields on office buildings, shopping malls and apartments in prime cities including New York, San Francisco and Washington.

The trend may be cut short. Turmoil in financial markets over the past three weeks -- triggered by concern that Spain and Italy will struggle to pay off their debts, signs that the U.S. will remain mired in sluggish growth through next year and Standard & Poor’s downgrade of the U.S. credit rating -- may send buyers back to prime cities and push prices even higher, as long as the economy doesn’t deteriorate so much that trophy properties suffer.