Land values down 90% from 2006 peak?

Today I noticed in search that there was a 512 lot for sale at L$ 1.5 per square metre. Before the land price crash of late 2006 (when prices fell by 2/3 in a day or so) the cheapest land, if I remember right, was over L$ 15 per sq. metre. Is my memory right on this?

Of course, I'm only talking here about the cheapest land in search - there's always been land for sale at silly high prices, which I presume never sells.

I'm assuming that the opening up of Zindra and the deepening RL recession have been the main causes for the recent falls.

I think land prices have been plummeting since long before the talks about the whole adult/zindra mess started...

nods 15/m sounds about right. last day of the land givaway is gone, but I dont expect significant price rises in the forseeable future.
the good news is a lot of dead land has been returned to circulation and land is indeed circulating. so long as it changes hands there is potential for growth.

It had some effect already, but I'd expect the bulk of it to come later.

Tier hasn't kicked-in yet for many Zindra swappers; many will dump Mature Mainland later; flippers haven't been allowed to sell the land they snagged during the swap; not everybody affected yet realizes they need to get off Mature Mainland; auctions haven't started yet on Zindra, nor for abandoned swapped Mature and there's already a lot of "purple" on the map, and lots more not-yet-purple.

But so far, the "Zindra effect" was only about -L$0.5/sq.m at the bottom of the market. Of course, the market had already fallen dramatically, so this amounted to almost 25% of what little value remained before Zindra.

The average price for a 512 plot in December 2005 was 3500L$ just to add some figures to the pot I wonder when they are going to stabilize? Maybe LL are hoping people will be encouraged to buy some land now the prices are so low thus creating extra tier payments for them and maybe more premium accounts.

Its going to be interesting to watch the prices over the coming months that's for sure

This link was posted in a related thread.

http://www.sluniverse.com/php/vb/business-land-economy/31437-mainland-prices-taking-dump.html

I would recommend that everyone read post #17 as it is an excellent post by Elanthius regarding the present situation and why he thinks land prices will not rise again.

The 2006 prices were a bot-driven bubble, they don't mean anything.

After the 2006 land bubble burst the low was L$3/m2. So this is only twice as low as the previous bottom, and that didn't happen in the middle of a global recession.

I'd suggest #123, too, where Elanthius tells us he's getting out of the Mainland market altogether. So the Flock isn't buying anymore. If other bottom-buyers follow suit, there could easily come a time when buyers will have a wide choice of parcels at L$0, some of which will end up abandoned because they can't even be given away.

(Why sell at L$0? Well, it doesn't cost a resident anything to hold land until their next tier billing date. So maybe some other resident can make use of the land, rather than abandoning it. But only abandoned land actually hurts LL's bottom line, especially now that it brings next to nothing at auction or won't get a bid at all.)

I suspect Elanthius' motivations involve more than simply the price of land: LL's new teleport throttling code makes it harder to run land bots at all.

Seems like the only way mainland land prices would go back up at all is if LL reduces tier rates on mainland. That would give folks some incentive to buy. Tier rates are prohibitive for people who want to expand their existing holdings. Even then, prices still wouldn't go back to where they were. The fall started way before Zindra opened - but I bet that's accelerating it a bit.

But that was AFTER the land crash which was in November or December 2006, when prices tumbled by 2/3 in one day - I was logged in most of that day watching it happen before my own eyes. Word at the time was that it was caused by one of the big land barons dumping all their land.

Here's something LL could try: if a sim is less than 1/4 occupied, ask the landowner if they want to flip it to a homestead, at a new "homestead tier rate"... they'd end up with more land and the same total number of prims, for the same tier.

If the sim has multiple owners, it might be simpler to make it a "homestead with prim bonus". They'd keep their same land or buy more up to 1/4 of the sim, and the rest would become protected land... it would get turned into a homestead with the prim bonus set so that they end up with the same prim levels they started with.

Advantages for Linden Labs: they could run more sims on the same number of servers.

Advantages for landowners: more land or guaranteed freedom from a dance club landing in the unoccupied land.

Disadvantages for Linden Labs: more work.

Disadvantages for landowners: possibly more lag than if the sim remained empty?

I'm sure some people would be happy to go for it.

From what I remember of the 2006 land bubble, which was at its height just after I joined SL in September that year, it was caused by a shortage of land and a belief that land speculation in SL was a way to make a fortune.

LL had just started expanding the grid, with Jeogeot being added bit by bit. Word at the time was that one or more of the big land barons had decided to dump their land holdings on the market driving down prices further and it turned into a self-fuelling downward spiral.

Do the bots need to TP if they don't spot something in search/land that looks good?

With the number of bots he must be running, I'd be surprised (a little) if the TP throttle had a huge impact.

Yep. They had just did another genius pricing action of increasing private island tier by US$100/month - 50% - and had some sort of grandfather deal where you could get in on the old tier. They got hammered with people doing that and the mainland stopped growing for a while, while they tried to catch up.

There was no real shortage of land, the southern continent had been growing rapidly for some months when I got my mainland, I bought most of Coonspiracy Central... in Jeogeot... at L$6-L$8 per square meter before the bubble started, and Linden Labs were dumping sims on the market through most of it. What started and maintained the bubble, and eventually triggered the crash, was automated trading... just like in the real stock market crash we just went through.

I bought on mainland because I wanted to be on mainland. The -LAST- thing I would want is to get juggled and tossed around into some new homestead thing.

While this idea might work for estate holders on islands, it would be a real problem on mainland.

The operative word is "ask".

I can easily see taking LL up on an offer like that, and getting 1/4 of a sim with the rest of it protected land instead of worrying about some blingtard club showing up on the unoccupied area. We waited the last one out but it wasn't pleasant.

I would also suspect that's a part of it. It's also Summertime, when people are out doing RL fun things and not focusing on SL quite the same. I'm sure there are other reasons.

In my neck of the woods, Bay City, we've seen a slight drop in price for land, with some parcels dropping into the 60s and 70s. Some of the sims remain very strong, while others still suffer a bit due to over-speculation. There have been a number of Bay City landowners who are focusing on Zindra properties, freeing up some very nice properties there.

The few parcels in Shermerville/Blumfield/West Haven remain at somewhat overpriced levels, with 512s staying in the 40-50k range. It is not that common to see land change hands up there.

Nova Albion has a glut of parcels, but prices are not as-of-yet budging.

Do you not think, that as time goes on and with new players coming into SL all the time, the perception that 'old' land is worth more, will have less meaning and prices will just have to fall in place with all of the mainland eventually?

Don't panic until Da Boom starts bottoming out.

That works if you own most or all of that 1/4. But if its like many mainland sims, and every 512/1024/2048 is under a different person's name - it could be a nightmare and even the asking could set off panic over who will end up in charge and where on the map they might get pushed to (or would they stay right there in perhaps, the center of a continent).

What would Linden gain by declaring 3/4ths of a mainland Sim protected land? The ability to put it on a 486-PC server running Windows NT?

I've always thought that when I buy it would be a full private sim, but recently wondered about a full mainland sim. I am aware that buying a full mainland sim isn't something you can do often and when they are available you can end up paying a little more than they are worth (is that right?).

But let's assume you could buy full mainland sims as easily as private sims. So my question is, if you own a full mainland sim with correct management can you keep lag to the minimum, or is lag on the mainland to do with any outside influences?

Its basically a game of chicken between the price of land and the price of tier.

Once those people get frustrated with the tier they pay, they'll sell lower or go straight to abandon.

The foolish move is to sit on it too long - eventually, as in now, the prices of land will get so low than abandoning becomes the only option...


I predict a small bump in mainland sales in a few months after Zindra moves are done. Once people realize how much they dislike the way Zindra was put together - those who didn't need to move there, who gamed things to get there, will probably go back to mature parcels either on mainland, or make the jump into dealing with a Caesar on an estate somewhere.

It'll be a small bump though - as Linden will fix some of the issues with Zindra, though some simply can't be fixed... and some of these people will just groan and accept where they are.

You lose a bunch of management stuff by going mainland. In particular Top Scripts isn't something you can see..

With mainland, you also get to worry more about neighbor regions - if a neighbor has a whole bunch of people on it near your border, your sim will be sending updates to those people, too.

That said, I think many lag problems are created by the people visiting the region. Spy objects with thousands of listeners, silly radars scanning everything nearby every .1 second, 1000-prim shoes with a script in each prim, etc, etc, etc..