Land Prices?

I am aware, Alt, of that method, but I have had a specific jira to bring back the closed auctions page.

Right now there are 13 live sims on the auction page. Been a while since I've seen a sight like that.

11 hours to go:

Papa (154,24 Mature 2496m

Teleport to this location

Current bid: $70,010.00

12Bids | Bid History

Price per m2: 28.05 L$

Open date: 2/20/08 2:30:00 PM PST

Close date: 2/22/08 2:30:00 PM PST

Interesting thread.

I bow to the few folks I recognise here who trade land for cash and would not dispute their data, because in some cases I have known of them for years now, and one assumes if they are uninformed they would be out of business.

However, in first life there now seems very little doubt we are heading for a recession on the back of the CDO/CLO, bank write downs, credit spread widening, sub prime, credit restrictions, Northern Rock, Citigroup, issues etc.

I think the problems could persist for several years.

That raises another issue here in SL, because this is what you could call an unknown, unknown. In short, since SL was up (March April 2003) we have not had a serious first life recession until now.

Will this impact SL? Views welcomed

I believe it will, however, the effects of it won't be fully noticed for at least 6 months. This would take in the time for those wanting to sell at a specific price and not dropping it until the last moment, this would include the time it might take LL to put abandoned land back to the market, which of course they may not do because of the obviously side effect of placing more land on a falling market, this also includes the time for job loss, repossessed homes, bank defaults and suspension of individuals overdraft facilities, and a 100 other things that do happen in this time frame.

Another however, depends on the length of the recession, if for our sakes its short, within six months, the loses can be supplemented by new income and we may only see a minor dip in prices.

But in all likelihood, it will last quite a while, then we have to factor in how LL would react to this, if it effects the world very badly, they may have to consider reducing tier fees to substain a in world presence of players, we all know having 12 million members is worth nothing if they're not paying anything into the game, but I think this would be a last minute option for LL, even for the most level headed businessman reducing your profit is very hard to do, even if everything is screaming at you "do it, if you don't you will die".

So this is why imo, things are more likely to get worst then better, but at what level of worst I haven't got a clue!

Good point, John. I forgot all about RL.

You could say people need diversions more than ever, but it also makes sense that people will be tightening their belts. And personally, I went from $195 a month tier to $0. So that's one less person on the Grid land shopping.

It can't help but impact SL, but i doubt it will be to any great extent. The entertainment sector has always been more resistant than most to economic downturns. In bad times, people seek an escape from the their troubles. After all, the start of hollywood's golden age coincided with the great depression. Additionally while a U.S. economic downturn may be reflected in SL, SL is much more than just the U.S.

In my adult life, the US is always heading into a recession during an election year. It's how the press scares people into voting for their desired candidate(s).

So far, with the exception of the 'credit' market, the rest of the economy hasn't followed the press into this recession. (And we rarely do.)

Every month and every quarter since this credit crunch began, the economy has posted unexpected growth and unexpected consumer spending. And you need two consequtive quarters of negative growth for it to be an offical recession. So far, we haven't had one quarter that meets that definition.

Also with the dollar being at an all time low, our exports are up and so is our tourism.

So yes, it's difficult to buy that house you couldn't afford to buy anyway. And you have to buy the Camry instead of the Lexus and you now have to put some cash down to do it.

But if you want that nice(r) house and/or that Lexus, then now is the time to figure out how to use the circumstances we are now in to make money. Flipping houses is no longer an easy way to make loads of money. Now you have to work hard at it.

As for SL, $9.95 per month is cheaper than 2 Starbucks drinks, one movie ticket, or driving into Manhattan (let alone parking there for an hour)!

And you don't need to pay $9.95 per month to enjoy SL! It's free!! So IF we do enter a full fledged recession, then it could be good for SL as people decide to stay home for their entertainment. It's just up to SL (and it's residents) to market it as 'free' entertainment.

Economic downturns in the U.S. do get reflected around the world, the reason the Northern Rock Bank in the UK collapsed was started by the U.S. sub prime market

The stock market and real estate prices beg to differ.But we are talking about SL real estate. You need to pay to play in that arena.

Jethro I don't know if you have ever been in a recession while running your own business, I went through two and in both cases managed to ride the tide, although the second one left me paying off £27,000 of 'so-called friends debts' and left me pretty tight, but everything you say I can't agree with, what you say makes sense yes, but honestly imo it really doesn't pan out like that, if it did we would never have a recession would we, i think your scenario is a case of 'rose tinted glasses'.

One last point I know for certain (not a fact, just experience) the entertainment industry suffers last, it depends on the length of the depression, the entertainment industry also recovers the fastest because as the depression fades away, people have money again and so yes they do go to the pictures to forget about it.

True. All world and virtual world economies are interlinked. My point is that while the U.S. economy is still the proverbial 800 lb gorilla, it is far from the only game in town.

Which shows why it's so easy for people to throw the term 'recession' around. Market corrections in one or two areas that need to be corrected, do not necessarily have an overall effect on economic growth or on consumer spending.

And I'm not saying it can't change for the worse. But after 4+ quarters of growth in the face of the presses doomsday chants, you have to decide if you live your life based on what the press tells you or on what the actual economic figures tell you.



Not if you rent!!

So in this 'recession' scenario, estate and land owners who chose to 'pay to play' could serve the market needs of the non-paying residents. Albeit, they may have to work harder and smarter.

So maybe instead of quickly flipping properties for high(er) profits, they will have hold them and rent them for small(er) ones. Or mall owners can offer free rent in exchange for a percentage of the sales. And commercial renters are going to seek those commercial owners who bring traffic and quickly leave those places that don't.

The SL economy is really no different than that of RL. There is always opportunity for people who seek it. It all depends on if you decide to look up or to look down. And in the words of one of our candidates, I chose hope!

But blind hope is stupid. You have to look at the market trends and adjust your business plan as required. And in that sense, in SL it's much quicker to change directions than in RL. For example, your classified ad can be tweaked daily. And if you aren't doing that, then don't cry about poor sales or traffic!

Agreed on that one Ravenhurst.

One of the few general asset classes (excluding T Bills, Gilts etc) that have increased in value since Xmas has been gold and commodities, both soft and hard. Was scratching my head a bit on gold, but learned today the Chinese have been buying it because they feel more prosperous.

For everybody else thanks for the feedback too. I also suspected that entertainment, if a modest cost, might be resilient to a degree. Unless of course it’s a stark choice between that and food in which case, none of us will be here. Although (and I choose my words carefully) I don't think it will come to that this time for the vast majority of us, at least I hope so

I've been through two recessions as an 'executive' and a third one as an entry level worker. In my industry I actually relish the thought that a recession will weed out those people who shouldn't have opened up their shops in the first place.

I see two kinds of business owners right now in my industry. Those that are worried about the economy and are focused on cutting their costs. And those that were always worried about their costs and they are now focusing on a new strategy.

So while one person is laying people off, the person across town is hiring some of those people.

And please don't start calling it a depression. It's already bad enough that positive growth is being called a recession, we don't need to make the economic rhetoric even worse!

Oh sorry that's just my mental state coming to the fore

What do you pay your rent with? Kippers?

I'll agree that I'm not the world's best economist though and probably did define recession incorrectly.

Most land barons had to switch to this way to make money a year ago when landbots came on the scene. So that's already happened. If you don't run a bot, there's very little money in flipping land, especially considering how much time you have to put into manually combing the grid.

You can create something and sell it in SL. Granted, it'd be a whole lot easier (and faster) to do it with some RL 'seed' money. And thus I wouldn't try it!

As someone who tried rotating light balls, mini waterfalls and nature posters as SL business ventures, I agree completely.

Hmm... 300 prims for one pair of nonblingy prim shoes a week? Might be interesting.

Just because the market has been inching up from the lowest point for 4-5 months does not mean that it's going to keep that stability. Over 80 sims out there like the sword of damacles isn't inspiring my confidence. If LL shows restraint with pumping out new sims and making sure the market doesn't plummet, bully for us and them! However, I'm not convinced LL will keep their word on that, or that they won't implement some new ban or tax or tier raising, that causes another mass sell off, like the the gambling ban or VAT did (personally I had fun during the gambling ban and the VAT instatement, if only cause I saw some older, more interesting, land available for a change, but it still twisted my nerves some). LL rarely thinks in the long term with its decisions, or attempts to foresee the secondary and tertiary consequences of it's actions. I HOPE they've turned over a new leaf, and this adfarm and anti-scams campaign is definitely a show of good faith, but a few weeks, is hardly a track record of note, not when the market has been yoyoing for most of the past year.

Again, I hope the you and Ray are right on the market being stable, and there being no crash below 7, but my gut says LL will muck it up.

Well some feedback in return for all those here.

I have a small (more or less not for profit) hobby in real life and that is virtual worlds, hence why I am here folks. My primary interest is economics and I realised a long time ago there were some quite striking comparisons with first life.

In terms of cost, my hobbies are around a few hundred pounds per annum. My focus within VR worlds is SL and World of Warcraft. At this level, the costs are not material in relationship to my income, so I think within some bounds my presence is unlikely to be impacted.

But...there would be no way in which I would be tempted to expand (which would take a first life cash input) because I am pretty sure (post gaming/financial ban) the only way to extract a decent first life business return for someone like me with no special SL skills is mass ownership/renting of Sims. And that requires thousands of real life dollars both up front and monthly ongoing.

So.... my view is stagflation. That is 95% of even premium level clients here would only commit pocket money (at best) to SL. That might raise something new within SL, and that is what in first life economic terms is called “A barrier to entry”, which would constitute an unwillingness to commit realistic NEW first life cash to any Second Life start up business

Just a view, feedback welcomed

there are always anomalies! I am probably the most experienced builder in my group of friends and when we all started 1 year ago it seemed most likely I would be the first to buy land, some in the group stated strongly "I'll never put real money into SL", well a year on and I am probably the only person in that group now without land. Exactly not sure what that implies or how it impacts on the subject at hand, just added it for some kind of reference.

http://blog.secondlife.com/2008/02/22/key-economic-metrics-through-january-2008/



Land that can only be *bought* by Premiums is expanding apace.
Numbers of Premiums are *dropping* -- nevermind expanding in line with land expansion.
Have most existing Premiums taken on as much tier as they want to?
Are they also hanging back to see if tier costs will rise soon-ish?

It does appear that expansion of mainland land economy will be dependant on some Premiums taking on sims of tier and renting to Non-Payments and Premiums who don't want the up-front cost of buying and/or don't want to take the risk of being unable to dispose of land except at a loss.

The expansion of the non-land economy must be dependant on an expanding user base, and a user base that had build privileges on some land.
What do people buy?
1) Items they wear (including shapes and avatar enhancements)
2) Items they rezz
3) Entertainment - mainly tips?



Without "a better Premium offering" and/or a move to mainland rental as the new land model, (2) is in deep trouble.

Yes, I can't work out why any island should be worth more than $1695 US unless it has content/tennants. I suppose it's the convienence of not waiting weeks for it from LL