Why do LINDEN let the land price drop continue ?

Everything is in the title.

LL claim the average price for mainland is 7/sqm. Jack has confirmed this in his office hours a couple of times. They're pretty pleased with this price and claim it's their target.

I suppose the only thing they could do to raise land prices would be to lower tier but that hardly seems to make sense since that's where LL makes all their money.

Lastly, it's not entirely clear to me why LL would even care what the land price is except to the extent that it limits growth because people can't afford it. LL benefit from the initial sale but after that every time land changes hands it's a private transaction which LL sees a tiny percentage of in LindeX fees if anything at all.

I would guess because Land prices were massively inflated during 2007, so they are now trying to lower the overall price per sqm so it is more affordable. With a rate of inflation that large, LL combated it by releasing massive amounts of new Mainland driving the price down making it a buyers market. I havnt bought land for years so dont really know what is going on but i would guess they are trying to settle the average price to about L$7 per sqm. Im sure someone will correct me if i am wrong.

Dont think they can do anything about it really.

Player to player real estate is stricky a supply and demand thing that they have no control over... and thats what's driving the prices to below $3L a meter....lots of people want to sell... and no one wants to buy.

It's like asking why didnt the american governemt step in and stop the selling of sub-prime morgages years ago.

Not entirely true, their dumping of land over the last year drove prices down and created the glut. Just like your dollar is worth less because of the misguided policies of the Fed and the government over the past 100 years, increasing the supply of land devalued it. If they had increased the supply of land to match a growth in consumption prices would have held about the same. But when they just kept pushing mainland out to the grid, we ended up with an over supply.

Well, everyone agrees LL can cause prices to drop but it's not clear what they could or should do to make them go up.

only partily true would work without other external forces .those forces in this case wear the huge gambling industy rize and fall gambling over inflated land price and value becouse money was flowing from everywhere, they had to ban it and since that point land has been on a pretty steady decline
i think we are near the bottom ,if prices continue to fall they will hit bottom shortly and the level out point will be about where we are now if this is the bottom they will bump up a bit

if your holding onto land hoping that it will jump back to pre gambling ban level it probly will not happen,if it does get the high it will take many, many years of groth to get there and you have to pay teir that whole time it will be like throwing good money afer bad

Land is cheap now. Surely that's good. Soon after I came to SL in Sept 2006, land reached about 5 times what it is now. The big meltdown came in the space of one day or so, I think in Dec 2006, when land more than halved in value in one day. I was there, I saw it happen. The cause was rumoured to be one of the big land barons selling off all their holdings.

The Great Land Crash of 2006 is one of SL's historical events, it shouldn't be forgotten.

I remember paying L$9400 for a 512m plot, which was about the cheapest, in the autumn of 2006. Prices went quite a bity higher than that before the crash. it must be remembered that there was much less mainland in use then too.

They increased supply without an increase in demand. Even without the gambling ban prices would have plummeted.

The only thing they can do, without increasing the resident base or setting a base price, is to buy the surplus land and take it off the market.

A lower L$/sqm is actually good for LL, if you think about it. It means more than just the "land barons" will pick up more land and thus, owe more tier to LL.

EGGSACKTLY!

perhaps quit introducing new continents would be a start... even ones already 1/2 prepared. let them stay Linden continents for awhile... or make the whole continent a giant sandbox.

no no no thats what i'm saying they would not have plummeted it would have been a slow decline

then you don't have a free market it's fixed almost like communism or a dictatorship where the ecomimey is fake

Newsflash: The SL economy IS fake.

Well that covers most of the world including SL then!

video game/3D chatroom *coff*

I'm curious to know why you think the banning of gambling had any effect on land prices. I don't see how it can have affected them.

To the best of my recollection, there were two periods when land prices dropped drastically (I wasn't in SL to see what happened in December 2006 - Conifer's post). Both of those periods were when LL was pushing new sims out at a rate of 10 day. One period was later in 2007, and the other period was a few months ago. They both caused prices to drop, and the second drop came before the affect of the first one had worn off.

Chris is right in thinking that, if you increase the amount of land, without a pro-rata increase in the number of real users, then prices will fall.

Right now, there are two 512s going for ~1500L each in the next sim to me, and they aren't selling very quickly, presumably due to their location, and the land being rock. Those are the lowest priced pieces I've ever seen - well below the starting price when LL auctions land.

i have a 512 on waterfront that i can't sell. in a moment of ridiculousness and uncaring, i even tampered with landbots by reducing it to 1500L, but no sell. back to 5k and that's as low as i will go. i paid twice that for it.

A lot of people believes land prices fell because of the gambling ban. And it's true that a lot of large casinos shut down and sold their land. it's also true that it coincided with a massive drop in land prices. Funny thing is it also coincided with a massive increase in the supply of land. Personally I don't think the gambling ban was as significant as people claim. I'm sure it did affect the flow of money, less "churn" of cash moving around the economy but the flood of land was way more significant than the selling of all the land those casinos were on.

the massive land increse was at that time was becouse the casinos had raised the land value it was conisidence the release to fix one issue that dried up becouse of another issue

ll is a burcracy the don't hit time schedules well nor talk to each side of the house well

To be honest, I think you're barking up the wrong tree with the casinos idea. I don't see how they could possibly have pushed land prices up, or how their demise could have possibly caused prices to fall like they did. I doubt that the ex-casino land coming onto the market was all that much.

really or are you just playing advocets devil? it had a two fold effect one people would pay rediculous amounts of moneys for large land tracts to place consinos on.other people see these prices and think all land is of that value even if it's really to small to house said bussiness.and it might be worth that if you could get a few small plots and hook them up for a bigger plot
the second thing is the money was flowing true most was being uploaded to spend in gambling and the downloaded after the loss and the casino won it but there was extrunial buys in the fasion and avi department with fueled a few things

it'slike when the big factory in town closes everything goes into the dumps for awhile

I think you are overstating the effect of casinos, both in increasing land prices across the whole grid, and in causing land prices to fall dramatically. There weren't that many casinso, and there weren't all that many people playing them. The largest number of people in them were campers, as I recall.

The only times that I've seen dramatic falls in land prices were when LL was pushing out lots of new sims.