Land Business crisis ?

Hi and waves to anyone ?

Since January this year I started to invest in sl to deal in realty on the mainland.
As quiet a newbie I was amazed that buying and selling went pretty quick and easy... People just seem to buy land to extend their play.
This continued untill May.

It has come to my attention that the business slowed down a bit from June onwards, althought I have extended my marketing with campaigns, links to a new website, ads, etc ,etc, just in case, although I have experienced earlier that the effect of these actions is nearly nil. People buy what they see or they don't.

I have heared more complaints concerning a crisis from realty dealers. My response was to take it more easy and change to a careful scenario.

Some theories I have ( that is if I'm not alone in the experience ), and I would like to read opinions about it.

1.
2007-I was just a super hype for sl ?

2.
It is a fact in rl business that just before, during and after European Holidays general sales in rl also slow down and pick up around Sept. again.
During holidays it migth also be that younger aged people are in sl having no funds or intention to buy land.

3.
Linden has rapidly introduced a 5th and 6th continent this year and crashed prices in such a way that it's not worth the effort anymore to deal in mainland.
It has come to my attention that the business crashed during the build of continent 5 and picked up again when it was finished.

4.
Extreemly low price seems to be the trend no matter what the added value and arguments are brought in from the sales side.

5.
A run to private Islands maybe ?

6.
A huge capital cash out from sl to rl.

7.
Abnormal and dramatic technical issues in sl during July and August ?

Or is it a combination of all the issues.

Any opinions anyone ?

Sl sucks!
any land price above L$6/m is theft. I still see land at L$20/m. Presently, the average land near water is L$10/m. On the old continents, it's still around L$20/m.

There have been a number of threads about land prices in SL. The biggest factor that has affected prices and which everyone seems to agree on has been the incredible rate of new sims being put up for auction. Just a few weeks ago, it wasn't unusual to see 50 sims up at a time. The Lindens have an interest in making land cheap--at least during the perceived busy period of the fall and winter. They are trying to increase the number of premium account holders.

Unfortunately, they run the risk of alienating their already established core user base by causing the price of land these users hold to crash (think iphone). This is very risky for them and time will tell if this strategy results in a net gain for LL and SL in general. Low prices now *may* mean better business and a more robust economy later. One thing to note is that recently the rate of new sims brought to auction has slowed somewhat.

I also believe that the summer (at least in the U.S. and Europe) is generally slow for any online activity. Who wants to be inside on a computer when the weather is nice and there are RL BBQ's to attend? Well, me for one but I'm a nerd. lol

If I were you and my business was to buy land cheap and sell it for a profit, I would hold off on additional land purchase until you start to see prices rise--even a little. Perhaps use your spare time to develop a new skill. There is a shortage of people who can design and build great content and a talented builder is always in demand. All that new land in SL is going to need content. . .

On the other hand, if you are looking to buy land to use yourself now seems to be a great time to buy.

This issue has been discussed on a lot of threads in this forum. Perhaps is somewhere to start. I guess the consensus is (such as it is) that a combination of most of the cited factors is responsible; I don't think there's any real consensus, though, on the relative weighting of those factors.

I'm not sure if I've heard support voiced for #5, the run to private islands theory. Although the Estate business seems less dramatically affected by the current land glut than is the Mainland, the markets are certainly connected; all is not rosy for Estate resellers now either, on average, although the exceptional ones are, well, exceptions.

I also think #4 is kind of complicated: a well-appointed Mainland sim will rent-out quicker and for higher rates than a bare stretch of ground. But for reselling Mainland parcels, well, there's never really been any value to add: almost every buyer will just return or delete anything they find on the parcel. On the other hand, now that the market is so soft and there's so much good land available, a parcel next to an adfarm or on a sim with a laggy club is not going to fetch much at all. I don't know of any statistics to substantiate that the low-end of the Mainland market has been hit disproportionately, but I'd guess that to be the case.

Another matter of debate in other threads is what if any target price LL has in mind for land prices (after sim auction), which is related to the reason cited as #3. Tea leaves, chicken entrails, oracular hallucinogens... many things have been tried to divine the intent of those inscrutable Lindens.

If the consumer is paying the price voluntarily how is it theft? It is basic Econ 101 as the demand for a product goes up, with a limited supply, then so do the prices. Old continents are in limited supply so they command an higher price. Or are you suggesting we should have price controls?

It seems to me that land ownership is an elite status held only by those people who have that kind of $$$ to blow every month on memory space for a virtual world. What are our priorities, really? I own a couple parcels and I spend $60 USD a month in tier....for someone like me, who is say average american middle class.... I just can't see putting any more into SL, as I have other things to spend my money on that are far more critical to my way of life....
So....I just get this feeling that SL is always just going to be catering to a very niche market....either business that has budget funds to invest in SL for marketing....or individuals who are either soooooo painfully nerdy that they will justify spending 100s on land whether they can afford or not....who cares if the kids need braces ... and/or held by high paid professionals who really CAN spend that kind of extra cash for 'entertainment'. And lets be real here.. SL is entertainment for the majority of the people involved.

Thanks Plato,

Great reply !

Mm, much of a technician I'm not rally, lol, ggg.
Very good I seem to be in analyses and selling. Already I had decided not to buy land untill at least prices seem to come to some stability and turn up again, at least a bit. Good advise you gave !

Thanks for enlighten me about the interests of LL. Didn't know that.

Well, I might be off to rl more I think.
However, I might start classes for end users about buying land in SL.
I think they deserve much more information other than the typical stories.

Thanks

ciao.

It is all a very simple concept. Supply and demand.

The biggest problem is that most people haven't been around long enough to truly understand what has happened. I want to say about October of 2006 is when a large land bubble was created. There was not enough land (supply) for the number of people that wanted land (demand). So, prices rose, and very quickly. LL just didn't have the servers available to release new mainland or PIs. This was a huge strain on the economy. Over the next 6 months or so, LL was doing nothing but trying to play catchup with the demand. Now they have finally archived that and prices have dropped to more stable levels. Will it last? I don't know. From what I have seen there have been 2 major land price cycles so far, one in 2004 - 2006 and this latest one of 2006-2007(so far). Both times land prices rose very high and then dropped.

You don't do a very good job using Land Search, do you? There are thousands and thousands of gorgeous plots for sale that you would not consider "theft".

So very right your are Chris and Raymond.

All my clients are still dear friends to me.
If they are happy, I am happy... Everyone is happy.

Open economy it is said to be.

Ciao

If it is in an established neighborhood and is some of the 40/40 terraform land, I would think that is a steal!

I believe it's mostly #3.

Someone did the math and there is over 500 sims worth of mainland for sale right now in square meters.

If there is a land crisis (I think of it more as a correction) blame LL for dumping so much land during the slow part of the year when membership numbers are dropping.

My experience tells me #4 is not true. I have sold premium land faster than crap land and have gotten more for it. And my rentals fetch more than the base level rent because of all the landscaping and features I have put into my beachfront mainland sim.

Great replied Raymond !

I also have the experience that premium land has sold quiet quick other than the vast amounts of "crap" around.
Yes, and I also have the experience that there is always a market for higher end ( premium ) land for some people with some space in their budget.
Strangly a low correlation to price I also have experienced ( to some point of course ). Especially premium land has sold very well and easy as said.

I agree it's point 3 indeed and at the wrong moment of the year;
and just maybe also point 7 ?

Ciao

I've been saying that for a while .

(Numbers from an old post I made, I'll assume they're accurate - /327/d5/173403/3.html#post1449981)

January 17th: land for sale 7,509,856m² (114 sims worth)
March 25th: land for sale 15,105,104m² (230 sims worth)
Today: land for sale 32,550,880m² (490 sims worth)

Even with over 500 sims worth of land for sale, how much of that is set to sale for way over market value (100l/sqm+)? How much land is sold each day to people? What is the turn-over rate? What is the total amount of mainland that is owned?

These are all important factors in seeing what the true market looks like. And since those 500 sims are set for sale, that means someone is still paying LL for that land.

Your last sentence is the most telling one. A ton of people are stuck with land they paid a premium for versus what the can get now. Many don't want to take the huge loss, so they pay another month's tier. LL wins by manipulating the market. And they get to pretend they are doing it to make land more affordable to people. If they really cared, they would lower tier prices.

land listed on the first few pages ($6/m) is the shittiest land on sl. you cannot claim any price over the cost of shit land is theft... i suppose its relative, anything over 6 may not be considered a good value if you plan to live in a skybox. but if you want a home on land with a view and nice neighbouring builds $6 isnt going to get you much, and spending more isn't over the top.

Value added -vs- value subtracted.

Value added: converting ore into iron.

Value subtracted: ticket scalping.


If you add value to land, via zoning covenants, improvements, fair dealing... you can make money that way. It's hard to do. Most people consider your prims and your rules as deficits, not assets, unless you are very, very, very, very very good at it.

If you subtract value, such as buying land only to force others to pay crazy-high prices for the good stuff... that's parasitic. Land on the grid isn't a natural resource. Essentially you rely on the host, and if the host could, they would shake you off so you wouldn't continue to drain both the host and its business customers.

I'm *glad* that our host flooded the land market, thus giving avenue to customers who can now get land at more reasonable rates. I'd rather our service provider get rich themselves, than essentially pass out free money like a concert venue in a limited supply, ticket scalping situation.

Incidentally all of that unimproved land out there hasn't even scratched value-added land demand, far as I can tell.

keep that in mind when ll decide your profit should be their profit and adjust tier accordingly.

Already have.

The service provider and I are essentially in a de-facto partnership, with regard to my estate. Neither of us wins without the other.

In fact, I could tip the private estate applecart a lot faster than they could.

But as nuanced as a partnership might be, it's still a damn sight better than grabbing all the good land simply so future customers can be screwed for more $L.

At the expense of driving even more people away from the grid, and with personal gain as the sole motive. Parasitic and awful.

You had the misfortune to join Second Life in the middle of the biggest land bubble we've ever had. The prices you saw as normal were gross distortions of the land market. The prices we are seeing now are much close to historic norms.

The land bubble was sparked in November of 2006 when Linden Lab announced that prices of islands were going up to 295US$/month from 195US$/month and that anyone who ordered an island before the 20th of November would be grandfathered in at the 195US$/month tier level for at least a year. LL recieved far, far more island orders than they were prepared to cope with. LL had a limited capacity to bring on new sims. And for a few months nearly all of that capacity was diverted to bringing on new islands, leading to a huge shortage of Mainland land.

Supply and demand moved mainland prices very high. Add to that, the fact that SL was experiencing rapid growth. Even when LL was able to divert more resources into adding mainland sims, the crash in Mainland land prices was fairly gradual because the demand was still very high. Only towards the end of Summer 2007 did the supply finally catch up with--then outpace--the demand. (Slower growth made a big difference here).

Unfortunately it seems that the vast majority of mainland for sale is blighted by ad farms and/or laggy neighborhoods. I spent hours in land search, and couldn't find one decent 512.

Land search is a joke. You simply open your map, focus on Corsica and look for yellow adjacent to ocean. You'll find a lot of really good land for sale. As always, the better land next to a Linden ocean is priced higher than sloped moonrock cut into 512m bits.

You're glad that people have seen investments plummet? You're glad that land is in depression? Our service provider are getting richer off of this yes, but even they recognised there was a problem and put the minimum auction price up.

However they aren't getting rich via premium accounts which are on the downturn, which totally defeats your argument that this is a good thing and that more people will own land.

It's supply and demand Desmond and supply is far outstripping demand.

Ad farmers hurt all but themselves (and indirectly estate owners or full mainland sim renters who protect people from ad cutters). Why won't LL address this issue? Residents can only do so much within the current structure. I makes my ill when I see it. I IM them regularly just to remind them it's sickening and selfish.

A typical IM: Hello MD. Just wanted you to know the way you cut land disgusts me. You send a message that you are only in SL for the greed and have total distain for the SL community. I will never buy a plot of any size from you, or support anything you advertise and I will ask everyone I meet to do the same. Have a nice day.