Land Prices?

I don't have a problem with a person who wants to try land-flipping, but I don't think LL should be obligated to operate purely in a way to bolster that industry. Of course a crash in land prices isn't a good thing, but SL needs to grow, and land has to get released somehow. LL shouldn't be coddling land-flippers.



If you bought a lot of land because you thought the VAT land selloff was the lowpoint, then that's the risk you took. It's troubling to me that you try to lobby for price-stability in light of this. It's like a conflict of interest. When these forums used to be moderated, they deliberately shut down land discussions for fear that the market was being influenced artificially.

I don't wish you any ill tidings, but I just don't think that land-flipping adds any value to SL. Prices are bound to rise and fall. The only way it's a Sword of Damocles is if you've made some poor decisions. That isn't LL's or the community's problem. Only speculate what you're willing to throw away as an entertainment expense, and take your lumps when they come.

Quoted for truth!

Well everyone can see the unfinished continent and we know LL will keep releasing more of similar size, so trying to make money on the value by scarcety of land is a risky proposition, value by content would be less risk

I like the idea of those creating valuable content making the most money. I have so much respect for people like Ace Albion, Lilith Heart, Cory Edo and our own Oryx, Nimue, Bradley etc who make things of beauty with the skills they have honed.

I also have a ton of respect for Desmond, Sarah, Avion and Incanus for their themed sims. And for Elanthius, Darien Caldwell and Wildefire Walcott for their business savvy.

A lot of smart hard working folks out there.

And yeah, the whole land speculating thing lost its luster for me when I realized I was basically working for LL, spending a stupid amount of hours just to cover tier.

Yep, and the supply of land is infinite and sooner or later 3rd party servers will connect to the grid and we will have new sims released at 1/3 to half the price Linden Labs charge as these companies will purely be geared for providing sims and not R&D

Excuse me, but I'm telling this thing as I see it. Elanthius was questioning my deductions about the future of the land market, and I was explaining my reasons for why I believe the market is less firm. Explaining my thinking, and how I personally feel about the conclusions I've drawn, is not lobbying; it's self expression. I'm not trying to gain any unfair advantage here. I'm merely stating what I believe, based on rational deduction, and in the aside over the VAT issue and gambling ban, how these two things made me feel personally.

I never even addressed whether I favor artificial price controls placed on the market by LL, in fact, I don't. However, LL has stated it WILL put out new sims, and it WILL control the market. I don't favor snowstorms like the one we just had here in the Northeastern United States either, but I have about as much control on those as I do LL's policies. Truth is, I didn't loose on the VAT institution, nor the gambling ban.

As for taking my lumps, I do along with anyone else in SL real estate. However, my business model minimizes risk, but as a consequence also minimizes potential profit and I fully accept that as a consequence of my risk-aversive personality. In the past, when I have lost money, it's never been more than a few hundred linden, but I limit my income potential on that. It's a trade off I can live with. As for the extra sims being a 'Sword of Damacles' again, that was a personal observation as someone who flips land. Maybe you like to post without thinking through or having a personal connection to anything you've typed, for the sole purpose of promoting your agenda and getting your way, but I don't.

As for your belief that that land flipping doesn't add value to SL, I disagree (feel free to disagree with me, but here's my personal take on the subject). The SL land market is a vital part of the SL economy. People pay for the land, and many do so in the hope of profit. Not everyone is blessed with artistic and spacial ability, to create lovely SL clothing and builds. Some people don't have technical backgrounds, so scripting doesn't work for them either.

My EDUCATIONAL background and personal interests lie in the Social Sciences, particularly Geography (and a human based track in geography, rather than the Earth Science end of the field). As a result of focusing many college projects on the study of land use and population, I've found I am able to read the land market quite well. In additon, I have created my own metrics, based on equations modified from RL demography, which I use to help me make decisons. The reason I had fun during the VAT dump was because I got a broader view of SL real estate and how people relate to it. Normally I do my work on average and lower value land, so getting to observe the more valueable land in transition was personally exciting. In short, in my work in SL I'm using MY skillset, and that is what everyone who works in SL, does or tries to do.

If DIRECTLY adding value to SL were the sole criteria for worth in SL, the only people making any significant profit would be programmers and visual artists. Everyone else would be donating to their coiffers, as well as LL's, and those not involved in that limited set of occupations would be far less likely to become emotionally or financially invested in SL, limiting the community and the experiences available. SL works best with diversity. Different people with different gifts each doing their own thing. That is how SL is built, that is where the value is.

just tp to some random region and open the map, then scroll around looking for 512 rectangles up for sale on sims with no other yellow. when you see one, tp and have a look.
imo if youre wanting to live in a nice sim without adfarms and whatnot dont even bother looking at land less that $11/m. the stuff youre seeing at 8.5 and 9 are the dregs of the grid and are not 'base value' for mainland. theyre the ghetto parcels.

ll are not going to let people connect server farms to the grid free of charge and bankrupt them of tier.
i joes hosting offers island servers for $1 a month, ll will charge $294 a month to connect it to the asset server. they will not let their own interests get priced out of consideration. dont hold out for a cut-rate hosting solution, its not in the cards.

LL will just have to drop their rates
Also it's highly possible LL will just sell their 2 colo farms off to 3rd party too and just keep the asset servers and work on development.

Actually, I am not so sure about that Nina.

I think (software experts correct me if I am wrong) multiple servers within a platform like this are called Shards. World of Warcraft follow this strategy to accommodate both different realm types (PvP PvE and Role Playing PvP and PvE) as well as geographic locations and Instances. This manages realm population as well further enhancing performance

It is one (but not the only reason) why the performance in game of WoW is stunning in comparison to SL. Other technical reasons include Peer to Peer networking (all connections share some load on performance) and some (but not all) information stored on your own hard disk.

I could visualise some walkthroughs for SL here. Maybe Linden Labs might partner with (semi) trusted third source server platforms on a geographic basis worldwide on a paid licences type deal. They could offer connections to the main grid and most important, connections to the central asset servers of Linden Labs. On this latter point, you could have a daily automatic dump free of charge, and an immediate personal dump at some cost. I think this might improve performance in game.

Just some speculations of mine folks

This does not explain how land flipping adds value in any sense. It explains how it has been personally rewarding to you, but not how it adds value to an end user's product or to the community at large.

Buying larger lots at auction and cutting them up into 1024 or 2048 parcels that end users can afford, with some nicely landscaped pathway commons between them -- that adds value to SL.

Buying up the smaller parcels and repricing them for more than the residents are able or willing to spend, with the result that land that residents could be using instead lies yellow and empty for weeks or months -- I don't see how anyone can claim that adds value for anyone but the land dealer.

Unfortunately, the land dealers who do the latter are far more common than those who do the former.

The latter is precisely what I was discussing. The former is necessity under the current system. The latter only raises prices.

HUH?????

I was just cruising around the Map and noticed that the island in Hikeulo is no longer Purple. WTF? When was THAT auction??

So I TP there Hikuelo 39,40,35
And it owned ....
Now there's trees and a Rezzbox for Ace's Spaces.

About Land says: Claimed: July 2004

BUT .... the born date of the owner is October 2006



Not that I had the resources to compete for that sweet spot, but ..... ????????

I never said it adds value to the LAND. It adds value to the SL COMMUNITY by creating a career that doesn't require a narrow skill set, like most SL careers, where if you aren't an experienced programmer or have excellent visual/spacial skills, you can't really make any money here. I enjoy reading books on how people learn and use what they've learned, and I'm a firm believer in the Gardner theory of multiple intelligences. My own skills are in analysing data and interpersonal relationships. Those are great for making friends, but not for making Lindens. In RL there is a place for people with my skill sets (not to menion other skill sets which I don't possess much, like kenetic intelligence), they work in education, research, law, and many different business fields, which require information to be processed, interpreted, then communicated efficiently to other people, but in SL, with its lack of physical reality and it's limited use of sound and voice, many people can easily be left out, at least from being able to make Lindens.

However, thanks to SL Real Estate (The actual flipping of land is maybe 10-15% of my work here.), I and those like me have created a niche for those who are intelligent, but not techincally minded, in SL. I benefit, sure, but so does any noob who decides to start working in my profession, AND SPENDS ENOUGH TIME LEARNING AND RESEARCHING THE MARKET, or who builds a business based on my SL profession, etc. The community is built stronger because it doesn't just reward programming and visual arts, but a more diverse set of skills.

I guarantee that if there was no Real Estate market in SL, the population here would be smaller and far less diverse. And lets not forget that realtors spend money here too. I dropped just over L$28k in SL last week alone. We stimulate the economy here, as well as the community.

SL Realtors may not increase LAND value, but we sure increase SL's OVERALL value.

I own land in Papa, I can give you a little background.

The auctions that ended on Friday were originally 3 parcels held by one person/group. Before being abandoned, they were listed for 1 million L$ for Papa; in Hikuelo, the island was 2 mil, the beach was 1 mil, or vice versa.

The Hikuelo parcels are the beach and the island, separated by a Linden waterway. They were merged into one parcel for the auction, over 12k sq, m.

Papa is a VERY stable sim, hardly any land comes up for sale. Most of the people who own there, own big pieces. So when a parcel comes up for auction, especially when it borders a parcel you already own, well you have a case of a motivated buyer.

Did someone overpay? Consider the only other parcel for sale is a mountaintop for 100k, I think not. The first rule of real estate (or virtual estate, in this case) is location, Location, LOCATION!!

Max.

P.S. to Sling... I don't know what you saw in Hikuelo, but I have met the new owner there, and it is not Ace's Spaces!!

Yes, I know the owner isn't Ace's. What I said/saw was that new owner had an Ace's rezz box out.

Ah! That's what got me - the joining of the parcels. I could have sworn that the Hikuelo parcels in purple were two separate when I saw them. But that was before the auction actually started.
I missed seeing the parcel going up on the auction page.

The 'claimed date' being earlier than the 'born date of the owner' is probably some weird glitch in the auction transfer.



Yes, Location - which was the point of my initial mention of the Papa auction plot being in the same bay as Hikuelo ---- in post #13 of this thread.

Wonder why the Lindens are over looking all those 64 64 sq meters at $5000 a piece right near their offices under their noses and they don't do anything about it. Not extortionate enough? If it were any of the "bad seeds" they would take action.

Yes, I know. I was just restating it a bit more bluntly.

Joy, there is a value to the community in having real estate as a career, yes, and certainly by having huge auction parcels cut into manageable sizes. But in your equation you're leaving out the value subtracted from the community when huge swathes of land sit yellow for ages when there are residents who could be making productive use of the land instead and when millions of lindens that could, if land was priced better, have been spread out throughout the SL economy instead goes into the hands of just a few resellers.

I'm one of those technically unskilled people you mention, and the land market is the only "career field" that's held my interest in SL, and I would have undoubtedly gone into if I had the RL capital and would have been thrilled at the chance to participate in the SL economy actively.

But I also like to think I would have had the community spirit and the pride in my own business to make sure that my customers actually got something for their money that they couldn't have had otherwise -- landscaping, community development, commons areas, what have you -- something that meant the final transaction was better for the end users because of my role as middle-woman and not just more expensive.

I'm not familiar with your work in-world and don't know which category you fall into, but I don't think it's debatable that far far too many land resellers fall into the latter category who make money for themselves at the expense of everyone else without adding anything of value to the land or the community.

The skilled professions like scripters and clothes designers -- they make money not just because of their skills but because the customer comes away with an object that they can use that they couldn't have got elsewhere. Land resellers who neither develop the land in any way nor work with the buyers to give them something they need... well, if they weren't paying tier, I'd consider them no better than any other type of content thief.

I hate to bust your bubble, but any realtor that sold BELOW market would loose money, and even more money if he or she were to spend time and addional funds on land beautification to boot. They'd also have their lost and found folder swamped with their landscaping tools, when buyer after buyer after buyer autoreturned them. I think you misunderstand the market. With the exception of premium land, that is mostly waterfront, and a small number of other parcels, most realtors sell at the LOW end of the market, not the middle. Larger lots go for more, true, but then the realtor has to spend more holding the land and paying tier.

The term 'flipping' denies the complexity of the work, and the market is always the price to be paid. 'Too high' is based on when the price becomes so high, people refuse to pay, and land goes unsold. That hasn't happened yet, and LL won't let it.

This is not to say huge swathes don't lay unsold, but most of those, again, with the exception of premium land, are held by nonrealtors, either trying to use the land search for advertising or hoping someone who isn't savy in land, will buy at the inflated price, in RL real estate, a practice known as the 'bigger fool theory'. A Realtor knows better.

As for your inability to enter the land market, you can thank BOTS not realtors for that. Before bots it was possible to find below market land lots by CAREFULLY examining the listings or, once the listings were 'fixed' to seperate estate from mainland, by being fast with your mouse. When undervalued land was placed for sale, it was realtors party, with everyone tping in to try their luck. Whoever got there first got the land. BOTS buy up ALL undervalued land now, then reset it to market. It takes the human brain 5/8ths of a second to register a visual clue and then send a message to the finger to respond with a mouse click. The bot is a computer program, and thus can do it faster. Don't lump realtors with botmasters. They are two seperate groups, who operate two seperate businesses. You can still enter the market but it is far harder thanks to bots. I was lucky, I started with one 512 and worked my way up, before bots.

My work in-world is buying low, and selling low. I won't go into detail, but I hug the bottom prices in the land search, consistantly, that is when I have land. I don't buy whole sims, because I don't want the tier fees to force me to overprice my land. I do work with buyers, but not if the buyer wants a price significantly below market value. I used to be more generous, then bots came. I NEVER landscaped the land I sell. I terraform to flatten it, but that's it. Very few buyers want a previous landscaped parcel. They send all the trees and snowmen and fun stuff back on sale.

As for your 'content thief' idea, get real. The land doesn't loose it's value when it is sold for a higher price. Waterfronts don't dry up. Green doesn't turn granite. Nothing is stolen. And the buyer walks away with LAND. There are some fashionistas that sell dresses at L$1000 that I can get similar quality or better for L$250. Did they STEAL the extra L$750 on each sale they make, no. They just charged a higher price and some in the market were willing to pay it.

There is value added to the community by a realty agent that locates land for sale for someone without marking up the actual land price. This doesn't take any technical skill to do. This is different than holding land and marking it up above whatever you got it for. You're not a mere realty agent when you actually own the land - you have a vested interest in a particular parcel. As a middle-man flipper, you just increase prices for people searching for land on their own, without assistance.

There is a niche for people who are willing to take the time to do a land search for others. But there would also be no concomitant harm to the community by the prices getting ratcheted up because of holding tier.

Middle level resellers are market-makers because when all they do is sell to each other, the market price for decent land goes up, and there is no denying that, except in the case of a massive land dump, your "Sword of Damocles."

Well, I happen to think it tends to work out to have cycles where land is cheap and then more expensive. A true fan of SL will stick around long enough to observe both and have the opportunity to get some nice land at an affordable price followed by an era where they can sell it at a profit and get some of the tier back they spent on it if they get sick of it.

If LL wants to continually grow SL, I speculate they will *have* to maintain cycles like this for awhile. There is simply a limit to the number of people who will spend hundreds or thousands of RL dollars/pounds/Euros for virtual land. There has to be a way to get people in as landowners in at nominal costs--and not crap land either or they will get bored and leave.

When people do land analysis, I notice that there seems to be a kind of "recency effect" at play. I've observed a few discussion threads about land during various up/down land cycles and sometimes even the *same* commentators will say something like, "You'll never see land prices as cheap as they were X months ago" followed 9 months later by, "You'll never see land prices as expensive as they were 9 months ago. . " Rinse and repeat.

Now, LL could truly stabilize the land market at any time and perhaps things will not change for awhile, but that hasn't been reflected in its history -- yet anyway.

I'm not saying anyone should sell below value, only that if they mark the price up, they should do something to justify the markup. If their landscaping is returned, it's because their landscaping sucks -- that is, it's not meeting the needs of their customers, no matter how pretty it might be. Prize Pyle bought the sim south of me when it first when online, cut it up, landscaped it, laid little cobblestone footpaths between all the lots before selling them. A year later, long after Mr. Pyle has left the area, those footpaths are still there, because they served the needs of the end users.


This is simply not true. The land is going unsold and people are refusing to pay. There's at least a sim's worth of yellow available in my sim and its neighboring regions alone, has been for months, and almost all of it is held not by private sellers but by large realtors with recognizable names. And while my area isn't amazingly wonderful, it's also a long way from being the ad-blighted dregs of the market. If what the realtors claim to be market value actually reflected the land's value to the market, it wouldn't be sitting unsold.


No, actually, I can thank myself for giving up a good career to move to the mountains where there are no jobs. Or if we want to blame somebody, we can blame Linden Labs for not having a Mac client when I first heard about SL and not advertising where I'd see it when they got one, so that I didn't join back when land was cheap. *g* Regardless, I wasn't blaming anyone, merely pointing out that as one of the unskilled community members you claim this benefits, I strongly disagree.


It's not a question of losing value, but of adding it. If a realtor isn't adding some sort of value to the transaction -- not necessarily material -- then all they're doing is reselling someone else's content. They're an authorized reseller, since they do pay tier, but still just a reseller. And they shouldn't expect to earn the same kind of money, or the same kind of respect, as someone who actually provides something of value first-hand. The "complexity" of the work or the cost of tier does not count in my book. The time and effort and money they spend is the same cost of business that any other successful business owner has to spend, evaluating the market and weighing their income and expenses; it's not something they give to their customers.

Here's an example, and why I'm wasting time getting into this debate now *g*:

There's some land in my sim that I've had my eye on for a while, two lots held by Realtor A and Realtor B. A's parcel was reasonably priced, B's parcel is overpriced, I think, not insanely so but still more than I think it's worth by itself. I've been planning to buy them for a while but was waiting for my tax refund to come in before doing so and couldn't predict exactly when it would clear. Both have been for sale since December-ish.

Realtor A set his parcel to sale just to me for a couple of weeks, which helped my peace of mind considerably, knowing the parcel wouldn't be bought by a club or something else horrible while I waited for my money to arrive. When he learned I was hoping for both parcels, he even (without being asked) lowered the price on his so that I could have bought both without going overbudget despite the higher price on B's parcel.

Realtor A was Holy Saltwater, and with just a little customer service, he added a great deal of value to that potential transaction. Although of course I'd have preferred the land to be cheaper, I wouldn't have hesitated to pay his price (even before he lowered it) and I wouldn't have resented his profit, because he earned it. And even though I ended up not buying from him, he's still getting his name recc'd on the forums for everyone to see.

Unfortunately, when the new sims started going out last week, he decided he couldn't reserve it for me anymore. My money came in the very next day and I went to buy the land to find that Realtor C had swooped in and marked the price up to something higher than it had been in months.

It still wasn't a bad price, and Realtor C did lower it slightly when I asked, but I still ended up paying more than I would have. And for what? Realtor C held the land for probably less than 12 hours, 16 max, and did nothing to improve the value of the land or the quality of the transaction. Hir smirky attitude negated any value of lowering the price, especially since the lower price was still more expensive than it had been 3 weeks earlier.

That land was already sold in all but name. If Realtor C hadn't bought the property intending to flip it at a higher price, I would have bought it at the same time I did anyway; the money would have gone to the realtor who earned it with customer service; I would have already purchased the more expensive parcel from Realtor B; and I would already be developing the land and spreading the remainder of my refund money throughout the economy with a bunch of shopping. Instead, Realtor C got money sie didn't earn, I'm still trying to bargain Realtor B down to a price I can live with, and Silent Sparrow, Creative Fantasy, etc. will have to wait until I know how much Realtor B leaves me with.

So, yeah, Realtor C made hir profit at the expense of everyone else in the community and I don't see any way around that.

The type of realty you prefer doesn't lend itself to SL, due to the limited amount of money to be made. The linden is about L$275 to $1 US dollar. LL cuts into profits further if you are expecting to cash out the Lindens or even just to use the lindens you've made to pay your tier. Let's say you charge the RL US standard of 6% commision for the realtor. The realtor would put in RL time doing much of the same RL work, with sellers and buyers who are all over the world, so might take days to just get them both to meet or get back to the realtor on offers and counteroffers, etc. (not to mention folks rarely show up when they agree to meet in SL, so you'd have to schedual 3 or 4 meetings, which both parties would wholeheartedly vow to attend, then one or both would flake on you, wasting the realtor's time and money).

If a client had the realtor find them a 4096 sq. m. lot, and the buyer and seller negotiated a L$9/meter price, the lot price becomes L$36,864, with the realtor's commision becoming L$2,212. Now, that is great if you're dealing in RL money. One such sale a week, would set you up nicely in RL, and would be worth the effort. That is less than $10 US dollars, when measured in Lindens, not even $35 a month after LL's fees, and yet it would take similar full time commitments that RL work does (you drop the travel and showing times, but add in the time zone mismatches, so they even out overall). Most people don't spend 8-10 hours a day in SL, and couldn't live off it if they did. Even if their goal was a nice Second Life, they'd still have to put in a full work day to have nice things, in a VIRTUAL WORLD.

SL is not RL, and RL real estate theory doesn't work in SL as well. Private sim land is quite different, as it's more in keeping with RL RE, but SL MAINLAND Real Estate straddles the fence between commondities trading and real estate.

Reminder that most people here do not come to SL to make a career out of it. Most people here who engage in business have First Life jobs, and this second career is merely a hobby. The few who earn better than that are typically top notch content creators. The land baron business doesn't have large profit margins to begin with, and if a flipper makes more than 6% then they must be doing pretty well - but they also run the risk of holding tier, and tier eating away at the profit. Let's take Rihanna's land, for example. Let's say that the plot she was looking at from Realtor A was about 11L/m2. Realtor C comes in and buys it, marks it up to 13L/m2, but sells it to Rihanna for 12. 1L/m2 is how much percent of 11? 9%. It's not a hell of a lot more than 6%. AND they had to carry tier. Unless you are a swooper or got a really sweet deal, there is little money to be made unless you buy in volume or are the auction winner.