How Low Will It Go: Deluxe Edition!

Well, its sounds like you are going to make your sim beautiful. I've found sometimes that attractive builds attract people to buy land next to you who have the same aesthetic sense. I'm cheering for you and I hope the land next to yours stays nice. I think islands are worth it too, but the higher tier makes it more difficult to run them profitably as purely residential areas, estate tools or not.

I wonder how LL views mainland rentals? Do they see them as a barrier to new premium members paying *them* more tier for smaller parcels? Did they anticipate that people would use groups in this way? I can see LL reducing or eliminating the discount you get for buying more mainland to counter this. However, by doing that they would destroy yet another major industry. My bet is that they can't afford that just having banned casinos.

Maybe, but on the other hand, one person who owns a sim is only one person to go to the effort to ignore and frustrate, rather than having to work at ignoring and frustrating sixty land owners. Maybe that's worth $3-$5 per month.

Nothing to do until my tier flips Friday and I can take ownership of Liome but watch the mainland market. Seems the reduction to 10 sims a day has stopped the downward spiral. Stagnant first page today with four of the worst shaped plots in history topping the list at L$6 a meter. Sim prices are on the rise again folks. Papercut anyone? Finally they named a sim that reflects how painful it is to fork over $195 a month in tier.

Last year, Zee stated that if/when mainland prices go up (although we already passed the time-frame he mentioned for that), the high tiers will proportionally increase more than the low tiers, which only makes sense since it's the high tiers LL isn't making any profit on.

The economy blog post made me think they're looking at substantially increasing sinks (higher/new L$ fees) instead though. That'll allow them to sell more L$ again, and it spreads the "cost" out over a lot more people.

And in the end, the answer was L$6.3 a meter. What a bloody mess of yellow rectangles!

It's still crawling downward... 6.2 a couple of nights ago, 6.1 last night, and at the moment there are several parcels going for 6.0 L/m.

I thought the blog announcement about sim releases going down to 8 per day might stop the decline, but so far it doesn't seem to be having any effect. Bad news for sellers, but very nice for those buying.

A 20% reduction in the steady and relentless supply is not going to do much.

Another factor: One of the barons buying right now is slicing and listing immediately at very low markup, driving things down faster.

Some wise vets on SC think it can go as low as L$4.0. Glad I did not buy my sim with intentions of a short-term flip.

Perhaps I'm not doing the math right, but that doesn't sound profitable.

Assuming the land seller gets a very nice exchange rate of 260 L/$, $1250 for the sim would be L$325,000. For a whole sim (65,536m), that's still 4.96 L/m. Add in tier and the 3.5% Lindex selling fee, and it seems low to mid 5's are the lowest an auction winner could sell for and still recoup the original $1250 they paid. (Am I screwing up the math somewhere in there, aside from making it rather optimistic for the sim trader?)

Not that I would mind it going down to 4.0!

Why wouldn't it go cheaper for people who don't need to recoup, those who buy a sim not to make money, but it's amoot point anyway with tier still at ridiculous rates and talk of raising it.

Yeah I heard it secondhand and I suck at math. L$6.0 is my best guess for the bottom of the bottom.

imo: when you can get a nice stretch of land for L$6sqm, the value of a parcel next to an ad-farm, would be very close to L$4 ? , although corsica is selling "cheap" i didnt notice any real price correction on the other continent's, dispite the Extra 10million sqm+ land available (for sale).

*i dont think we have seen the full effect yet

your formula assumes you hold the entire sim for the entire month.
but what if you flipped one sim a week? your $195 tier would cover all four sims.

Since most people use land search to find the cheaper parcels, it's only a matter of time before impatient sellers on other continents lower prices to avoid another month of tier.

In my opinion, the value of a plot next to an ad farm is L$0. Which is exactly what ad cutters add to our SL experience.

Actually, I specifically left tier out of the equation for the very reason you mention... because we can't predict how many times during the month the flipper will cycle through different parcels. If there was no tier (and with the unusually good exchange rate I used), the 3.5% cashout fee still brings the break-even point up to 5.13 L/m.

If the person actually could buy and flip one sim a week consistently, giving us roughly $50 tier on each, that ups the number to 5.33 L/m. Add a smidgen in for profit, raising that to 5.4-5.5 L/m. So, low to mid 5's, as I said earlier.

But Tegg is right... I'm basing my base price prediction on the price of new sims coming to auction, just because in my experience that's where I see the cheapest plots show up. But if land remains plentiful, there is no reason why older not-so-nice land being resold couldn't go below that.

And of course my prediction is based on the entire sim being sold for the same L/m price. But if there are some parcels that had a higher value, such as being on a protected border, the lower-value parcels could be sold at a lower than average rate... meaning the base rate goes below my prediction.

So many variables to consider... who knows, maybe that 4.0 rate is still possible!

if you were rolling sims consistently you likely wouldnt be cashing out that often though. youd probably keep your buying money in game at all times, and only cash out your profits when it was... profitable so you would not pay the fee for every sim.

however it is done i am convinced that 'bulk' is what makes it profitable.
and the free cash to both feed in and sit idle.

True, no matter how low it goes many will not buy, I have enouh in the bank to buy 3 islands tomorrow, but even if they were given to me I wouldn't take them because of the overpriced tier, it's like a free car that costs you $295 per week to register.

arrrg $500 rego last week

What are the initials of the baron? I usually do a morning check on that but forgot to today. This baron is slicing purchase prices of all his land?

Oh, I'm seeing price reductions on the few parcels available (from multiple sellers) in my "home" sim; it's mixed-use, no adfarms, on the big continent south of South Continent. There, 512s have gone from over L$6K to L$4.2K over the past month, with most of the decline in the past week. Granted, that's still over L$8/m2, but that's a big change from over 12.

And no matter how fast the "flippers" are "flipping," there's still a tremendous amount of yellow on the map; that's why some predict L$4/m2: if ever one of the "big guys" decides to cut their losses, there's no guarantee the resulting prevailing market price has to come anywhere near break-even. In the real nightmare scenario (tier increase, anyone?), the panic could make the run on Ginko look like a walk in the park, with whole swaths of Corsica and Nautilus just abandoned to the Gov. That's very unlikely but the point is, there just is no real floor above L$0/m2.

The modest reduction in new sims to auction per week is just obviously too small to reverse the decline; I doubt it will even counteract the effect of uncertainty surrounding age verification. And it's so *obviously* too small, I can't think the Lindens are so optimistic about demand as to imagine this "baby step" would stop the slump. So whatever they imagine as a target, it's evidently still lower than the current prices.

i think the only thing the lindens take into consideration is high bid prices. they see sims going for 1600, they cut back, 1400 they cut back a bit more... i dont think they care at all about in-world land value.
the only demand they concern themselves with appears to be the demand for sims.