Land prices finally heading the other way?

I just sold two super premium mainland lots for old school prices, back to back sales. I thought I was going to be sitting on these lots for a long time while waiting to get back even partially what I paid.... but they just got gobbled up this morning... full price...

I haven't had a chance to check the rest of the market to see if this was just a fluke or not...

Too early to say really. The new system arrives this week, there will probably be an initial surge in price but other factors are on the horizon.

Yeah, prices seem to be creeping up a little. People are at least looking at the land for sale in my area--before it was a ghost town. A few highly prices plots have sold that had been sitting for a month.

I'm excited about the upcoming ability for residents to auction their own land. It will make it easer to find and compare nice plots with each other and to perhaps readjust your land holdings/tier when you need to. Hopefully, the commission that will likely be charged will not be a deterrent.

Still slow but picking up. Amazing what small break from the relentless dump can do.

One has to wonder
1) Were buyers holding back?
If they were then have they succumbed to "How_low_can_you_go" fatigue just days before sim auctions are due to resume.

2) Was there any significant number of end-user buyers anyway?
- New Premiums?
- Formerly Landless Premiums tempted by lower prices?
- Landed Premiums tempted by relatively low prices into expanding their tier?
- Landed Premiums dumping their old land and buying better locations for low prices in new sims?


I did notice some water plot prices rising over the past weeks. *However!!!!!!!, those plots have not sold. * Duh moment:- Rising prices are not an indicator of anything important if the stock isn't moving.
I did notice some equivalent/same neighbouring water plots with (much lower) static prices over the same weeks. Those haven't sold either. So go figure a price increase in that case.

Back in the days of new Nautilus, those plots would have been snapped up at twice the price.


A friend of mine bought some land in the high granite wastelands of East Corsica. All around there seemed to be activity by mini-micro-flippers driving the 'buying price' of a 512 up to around 3300L - and the 'asking price' to 3500L. "Look Martha! We'm in de prupurty bizniz"
That rough end of the market seems very Ponzi-like to me.

Could it be that the only the good locations are going to end-users? The OP sold "super premium mainland lots for old school prices". That's not an indicator of the general market. That's niche market.

Where's the end-user demand for the bulk of all that yellow?
For my own part, if tier costs took a dive, I'd buy more and have fun with prims. But maybe that's a niche market as well

I still feel that the combination of factors - a large land dump, high grid instability, and the gambling ban combined made this land dump a more severe correction than the last. Correct me if I'm wrong, but this land dump was of shorter duration with a greater decline in prices. The last dumping of sims resulted in a correction; I would call this a crash.

Amen.

It felt to me like this dump was bigger and more consistant than the last. But I agree we had a crash as a result.

I think end users wanting pony up more that US$8 a month for tier are few and far between. Land barons are still around but not many are buying up front page of search plots are causing prices to creep up like they used to. People may also be taking a wait and see approach as far as the new auction system (although as far as I know, it won't change anything).

Another point: I have heard of several people abandoning land due to performance issues. Until it is stable, the yellow will remain.

I think the "baby barons" got a taste of what it's like to hold tier and scaled back purchases. The backlash probably came through middlemen holding too much tier, as a result of a groundswell of people refusing to pay a premium for resold land. When Black Thursday and the later dump came the first time, I was amazed that prices didn't drop more than they did. With 16 sims a day, you would think that you could get one at a fairer price than that...but this time around, you could, unless it was a water edged sim with a lot of usable land - and even then, those are a bargain compared to the highs of the previous Winter.

oh great!! now you jinxed it!!

They should start introducing in November a few rare specialty sims (and/or) with full terraforming and unique rare land terrains that may be highly sought after in 1024 sq.m sized parcels that cannot joined or divided (hence ad farms would have to be at least 1024 in size).
Also the person who won the auction on these would have bought it already locked in as 64x1024 (LL locks it sold like that somehow). There's really not that much of a need to join land if the parcels are only 1024, so if someone wants a 4096 sized lot they just buy 4. 1024 sized parcels would also restrict the terraforming land surface area somewhat. But yes those ad farm types might strategically buy certain "1024" plots on that sim, maybe 4096 sized plots that cannot be joined or divided??

Also they could give the sim auction winner the choice of dividing up his sim the way he chooses before the locked in "cannot join or divide land" is set permanently before he can sell.

There's certainly a lot they can do anyways besides all the above.

Yeah i was delighted to get a sim with two different beaches for $1951. Even though prices went to $1550 after that, I still feel like I got a bargain.

It would be a real shame if we see land prices going back up too much. Cheap land is a good thing.

Prices don't seem to be heading the other way from my perspective. Things are a little muddied by the huge amount of 16s dumped at the bottom of the market but basically prices right now are exactly where they have been for all of September. We all sell the occasional parcel for 20/sqm or 10/sqm but that doesn't mean anything except you got lucky. Also the price of a few parcels you happened to see for sale in one place or another is nearly irrelevant. Look at the entire market via the land sales search tab before drawing conclusions.

As for whether this was a crash or not, I guess its semantics but to my mind what happened before was a crash. It was entirely psychological, we fell faster and further than we did this time and there was almost no good reason for it which is why prices bounced back quickly afterwards. This time prices fell slower and for good reason. The market was flooded with sims for an extended period and the actual population is finally declining.

The thing that people don't seem to get about this latest slide is that it was so slow that land flippers were almost entirely unaffected. Perhaps a few less experienced traders lost money from holding land for too long but most of those sim buyers and land flippers sell their stuff fast enough that tier costs and gradual price movements are irrelevant.

For the future my feeling is that if the population stays stable or continues to fall then there is a strong risk of land prices falling too. Price stability is not reached by releasing a set number of sims per day as everyone here seems to think. Stability is only achievable if the number of buyers is proportional to the amount of land in the system (whether it be for sale or not).

Hopefully Zee will get involved in the land market soon because it's economically unfeasible to just release more and more sims without finding people to buy them. Hopefully LL can get into the business of reselling old abandoned land to sate their thirst for cash otherwise mainland prices will collapse to 0.

Huh? I agree with the rest of your post, and I agree that if the population falls, the probability of there being less buyers becomes greater. But it's not a guarantee. There may be a smaller population but maybe there will be more buyers as the grid stabilizes or they accumulate enough stuff to need land to rez it on. Besides, it's not the number of buyers that matters. It's how much they are buying. All it takes is one guy to affect the whole market if he is buying or selling enough land.

And please explain what good land in the system is if it's not for sale to a buyer? Why would land that is not for sale matter at all to a buyer? As far as I'm concerned, red land is dead to me. All I care about is how much the other yellow is going for, because that determines how much I will pay and what I will set my land for.

I guess you're saying it matters because of the total population and the fact that the sold land is owned by someone who is no longer in the market. But I am only concerned with people and land that are IN the market. Unless I'm missing something. I probably am.

Theres always case of supply and demand,
I own half a sim... and I purchase land as i need it. But as ultimately as an end user why would I buy a parcel thats been marked up before my very eyes by 25%. We arnt talking guys like The Honourable Mr Figtree who deal in a SIM we are talking the 512/1024 lot.

Guys be real ... with land currently at anything between 6 - 8psqm why why WHY would ANYBODY want to pay you 28psqm, its not thier problem that you bought the land on a whim thinking that somehow prices were gonna go to 50psqm. Stable prices were roughly at 10psqm. Im not a land dealer by any means and as such dont buy and sell but I think there is lots of land for those people wishing to pay tier... theres no shortage and thats where the low prices come from.

If i sold the ONLY tv in the world ..... I would sell a hell of a lot of TV's, if everyone sold TV's the only way mine would be more attractive is thatif the product was cheaper driving down prices.

Ive said this before ..... but if you deal in land... you want to hold all the land and there be none available.. unfortunately this isnt the case at the moment. I am sure better times will come.... but what it feels like is saying....

" People of Second Life..... End Users ... we want land to be realllly expensive ", the question should be more is the current price more realistic in comparison ... will those asking for unrealistic prices eventually fall off the radar and those who truly are dealing in land will be able to buy sims.... redevelope and sell rather than the mini barons expecting 100% profit.
Who knows .... I certainly dont .. im no economist, maybe people who want land are now buying the cheaper parcels before the mini barons ... maybe the land "trick" has gone... maybe LL has flooded the market to lower prices to get more tier for individuals.. ??????

I dunno

I like my new title. tyvm

I will provide some data to make things more clear in our minds.
These are the average cost of auctioned land per month and per meter the 2007 in Lindens and also the supply of land.

avg price supply
January 2007 14.79 6,540,588.00
February 2007 12.65 13,917,168.00
March 2007 11.65 19,072,720.00
April 2007 11.47 18,375,232.00
May 2007 10.44 14,468,736.00
June 2007 11.28 7,932,696.00
July 2007 10.98 11,690,336.00
August 2007 7.78 22,250,056.00
September 2007 6.48 2,707,952.00

To me the big factor is the supply. After the strong crash we had ,especially in August (from 10,98 went down to 7,7 and the decline we had in early september , and taking into consideration that lindens postponed a bit the supply, then i would expect that prices will move a bit up. There is a direct relation of land prices and supply proven by numbers.

We have also to take into consideration that in july (with linden released data ) 5810 premium accounts were lost and i guess more in August( LL hasn't release the statistics yet) reducing the number of people owing or buying land in mainland. This is also affecting the land price for sure.

Unfortunately we can only analyze the past with the data but can't predict what linden are planning. We can just make assumptions


Sorry for unaligned numbers, can't fix this

I guess my assumption is that on average the amount of land that buyers want is constant and the number of buyers is proportional to the total number of premium members. Beyond something crazy happening like tier costs going down then I don't see any reason to change this assumption.

As for whether my assumptions are valid or not... I guess I concede that the amount of land that buyers want simply needs to be linked to the amount of land for sale. I think you'll struggle to measure that directly though and it will be strongly correlated with the number of premium members.

Cool. I understood what you just said. I think my brain is finally making a comeback after what I did to it at 47 Grateful Dead shows.

Ain't talking land fun?

I don't think premium members is the ideal metric. If people are going basic and renting from Raymond on his mainland sims, the land is still in demand. One landlord can represent the land requirements of 16-20 people per sim.

I don't know what the ideal measure is. Some factor of active accounts or concurrency.

I do know there is a lot of yellow on the map, all the same.

errrrrrrrrrrrrrr..................

Supply and Demand then *wink*.... if people want it ... it will sell and prices will go up.
if people dont want it .... then prices will go down untill it sells.

Yep paying more would be fine on the initial purchase if tier was reasonable...........
Some end users like me just buy land to live on it, we really don't care much what it's worth in 2-5 years time.

Unfortunately......

The metrics dont represent the data at hand...

If 20 people rent a beautifull 2 bed apartm... ooops sorry I mean parcel from " The Honourable Mr Figtree" these people would bring far less tears .... ooops there I go again.. Tier to Linden Lab. LL would LOVE for more people to own land.. its thier bread and butter far more than membership or skank ... sorry i mean SINK.

Joke aside, its all down to scaleability, some folks in SL are purely in the land business and for them its a tough time.... its not a depression OR crash. It was an engineered pricing cull by LL to reduce land prices to make land more attractive to the END USER .... NOT reseller. Remember LL dont like 1 Person owning a sim ... they want 30 people owning a sim full of parcels each with tier. I strongly believe that as LL do no want to decrease the cost of tier they want to make the land SO TEMPTING that people will WANT to pay the tier as the land is so cheap, sort of "buy now pay later".

Ultimately they are tying a ribbon around thier product to disguise the TCO

Yep and people are buying it of course because paying twice as much later and still paying the same tier is just dumb