Complete Land Auctions Summary

As a test of my new land auction analysis tools, I've made a list from the public auction closing information. A lot of interesting facts can be pulled from this one page alone, and my query tool has even more to offer once I find all the right questions to ask it. (If you have ideas for questions, let me know.)

One thing that may stand out to some of the people that view this list are what have been called "land barons". I don't share the common view that land barons are hurting Second Life. I think they have little detrimental effect (they make some profit from their work) and take some of the workload off Linden shoulders. (If the Lindens sell a whole sim and a baron buys it, parcels it, and sells it... It saves the Lindens the effort of doing all the parceling and auction listings themselves.)

All I want to do is put this public information where everyone can see it in an easy to understand format without jumping through the hoops I went through these past few days to get it all together.

Expect more data along these lines in the form of charts, lists, and graphs soon.

(Now if only the in-game land sales records were public, like in the real world...)

THE LINK: http://tigercrossing.com/auction_report.html

holy shit am I reading that right someone spent 51k US on land in sl?

Excellent work, Tiger! This sort of analysis of the publically available data is a huge aid for those of us trying to track and understand how the SL economy moves and shakes. It would be interesting if someone built upon this work and tracked land resale prices post-auction in the same associative manner.

This is a wonderful public service, thank you. It's especially important because the auctions don't appear to be visible beyond 3 days anymore. It'a very important public record.

It would be interesting to hear the total in US dollars and Linden dollars transacted and to see a chart of how that worked by weekday or months, to see if the Tuesday payday affects the markets or not of there are seasonal/vacation variations, weekend variations, etc. I don't know if you kept the date and time factors to see if night or day is lower or higher, etc.

Then it would be interesting to go track these parcels and what happens to them next. How much to they get marked up, and where? How much do they get cut up, and where? Obviously that's impossible but food for thought.

Anshe and Schwanson are pretty good at acutions. Not only do they have #1 and #2 positions for total number of won auctions, they also have very low Total $L/m2 rates.

Not too shabby.

No... she spent US$40,892, and did a bit over a hundred grand in sales... the US$51,266 is her profit. BTW, she doesn't live in the US. I don't know how the tax laws regard foreign nationals, but if they work the same as for expatriates, the US government may not care about the first $50,000. So she may only pay a small amount of USD tax on that. I don't know how her government will tax it though.

Holy freaking crap.

This data reminds me of the current American retail situation...

One mega-leader who works on low profit margins but high volume (Walmart), then perhaps another discount retailer (Target), and then department store chains that work on lower volume but higher profit margins (Sears, etc.).

Scary parallels.

LF

I've added two charts to the page that I made tonight. One is the average L$ per m2 price for land (as determined by the auctions that closed that day) for each day since the start of the auctions, over a GOM closing price graph as a general comparison. The three colors of purple are a mix of two graphs: a very chaotic one showing the actual L$/m2 value, and a 7-day rolling average. Chop off the light colored sticky-up bits and the two colors left are the rolling average. Dig out the other light-colored parts instead and you have the more chaotic actual values.

The other chart shows the auction $-spent activity levels. Days where very high-priced auctions closed, or a lot of smaller auctions closed, are taller. The 3-color design is the same as the first, also over a GOM background. Note the correlations between all three charts.

No, the US$40k number is how much was actually SPENT with US$. The US$51k number is the US$40k + the L$2M converted to US$ using each auction day's GOM rate. In other words, if she had to buy the L$ she spent on the day the auction closed (to pay for it) US$51k is what she would have had to pay in total. (US$11k to GOM for L$ and US$40k to LL.)

Her gross profit would be however much L$ was made reselling all that land, converted to US$. A currently unknowable amount. One would assume that it is more than US$51k or she's losing money. Her NET profit then would be the difference.

tiger, can that be sorted by mature and pg?

great work, btw

Wow, who knew that Schwanson was Target?

No, he's clearly the sears of the bunch.

oh I get it now

Yeah odds are profit is only around 10%-20%, all said and done.

Probably around 5K-10K USD total profit would be my guess.

Oh, btw, you get my brilliance of the week award, Tiger..

This is good stuff, Tiger. Nice work, and thanks for doing it.

I would be interested in seeing not only the number of auctions a person has won, but also the number of auctions they bid on, and a percent success rate. I'd also like to see, and this might be hard to figure out, how much a person bid up auctions they did and didn't win. Why do I want this info? Because my casual scanning of the auction data suggests that the "land barons" have a significant effect on auction prices. I see a lot of auctions where the same names drop one or two bids, bumping up the final sale price, but not competing to actually win the auction. I would guess that the people who top your list of number of auctions won actually have the lowest rate of winning auctions.

What would that mean if my guesses are true? It means that the land barons are keeping land prices high by inflating prices by bidding when they don't win - this may or may not be an intentional effect, and I'm not making accusations. It also would mean that some of that lovely profit they make is on the backs of increased auction prices, and thus in-world sale prices as well, for everyone else. In other words, they are siphoning money out of the small guys' pockets for their own benefit. Just like Wal-mart, as someone said. I'd love to see if this is the case or not.

Thanks, Tiger. Very nice report

I think this should finally put to rest some myth. Such as myth that realtor drives up auction price, at least as far as I am concerned. I never bid very high and buy a lot of land that nobody is willing to pay market price during auction

If you want compute profit need to take into account
- real selling price, also including hard to sell land
- tier fee
- transaction and currency conversion fees (GOM, PayPal, bank charges etc)
- gains or losses from change in exchange rate (in my case very unfortunate recently with both L$ and US$ loosing value to EUR)
- about 30% income tax. Where I live tax is higher than in US.

I think taking all this into account I still do a bit better than if I would work at McDonalds But now you look at 2430896sqm of land. This is 4748 parcels of 512sqm each. And this only includes auction land and not all the land I helped people in world unload and resell. So here we get to another myth: that all realtor are lazy bones who don't work. Who ever sold land once can imagine this make somebody a little busy if doing thousands of times For Anshe Chung story only exist one simple explanation: work, work and work.

Thousands and thousands of sqm served and only happy customers sofar Makes me feel very happy business girl

Mmmm, why exactly would somebody want inflate prices in the very market he or she is restocking? Well, I can only speak for myself. I am only interested in nice price auction land. If somebody else want buy land on auction around market value, I am happy if he or she quickly outbids me on some land and moves on, instead of bidding up auction after auction after auction.

Besides, I don't think it possible to bid without intend of buying: you don't know other people's max bid and everytime you bid you might win the auction. Btw, on most auctions I think you will see realtors bid against each other.

I didn't say that you wanted to inflate prices - I specifically said I didn't know if the effect was intentional. If you are trying to keep prices low, it may be that your bidding strategy is working against you. But there is no cost to bid and lose, except to the person who had to beat your bid to win. Since "realtors" deal in large volumes of land, winning an auction just means you have more land to sell and the price paid is just part of your operating expenses. But for the small guy, what he spends could be a big chunk of his SL assets, and I suspect that most of their purchases are not intended for immediate resale.

I disagree that mostly it is realtors bidding against each other. The only auction I ever took part in was me and a realtor/land baron, for a 1024sqm piece of land that was completely surrounded by my own land. The realtor plopped down a bid for the parcel that tripled what I ended up paying for the land, but never came back to up his bid. It is shotgun bidding - someone bids on a ton of auctions to see if he can win one here or there, making everyone else pay more in the process. I don't think mine is an anomalous case, as my scanning of the auction data shows that sort of thing happening often. That's why I asked Tiger to include analysis that would confirm or refute that.

Now, how would you feel if you found out that the bids you made cost other bidders (pulling number out of hat, since you claim your profit margins are so low) ten times what you made in profit? Would you think it would be fair to somehow limit the number of auctions someone could participate in?

What realtor do is bridge the gap between in world market and auctions. This means realtor adds demand on auctions, which of course raises prices but realtor also adds supply to in world market which reduces prices in world. As long as average prices on auctions is significantly lower than average prices in world this makes sense and is very fair. Since I started trade land, the gap between in world price and auction price became smaller. Land in world became cheaper and people have a lot more land on the market to choose from.



Sorry, this is not logical. If you argue that somebody bids higher than he/she wants buy some land for, then that person risks buying something at inflated price and in the end loose money trying to sell it.



Most small guy buy in world. They are my happy customers and now pay less than before I started business. Thanks to hard work and high volume they get nice land from auction with much smaller markup than, say, in June.



Would be interesting to see actual statistic. Because I think you are dead wrong on this. One experience does not mean anything.

And in fact this just show that nobody try drive up any price. It is simply that there is demand for that 1024sqm parcel in world. There are people who want buy and pay a certain price for this kinda land. So as realtor, I try to buy land at a certain price level, which is lower than what that land usually goes for in world. I want to win that auction, if it does not exceed my buying price. The more parcels I can buy that way, the more I can offer on in world market, increasing supply and driving down prices there.

It is also illusion that without this person overbid you, you would have ended up paying your original bid. Somebody else would have bid. Maybe another realtor, maybe another resident.

And why exactly should you be able to buy land for, say, 2 L$ per sqm if people in world would pay 8 L$ per sqm for the same land?



No, it is going to the market and buying everything that nobody else is willing to pay more for. Then bring the purchase to other market and sell to people who would otherwise be stuck with more expensive land. If you look at volume realtors actually bought, then I don't see any shotgun.



Would be fine with me. Because I know at the same time people in world would save double amount by cheap land I bring to market AND enjoy service AND enjoy big choice of ready-to-buy land

I honestly don't care much for the priviledges of the small minority of people who bother with the auction system as compared to the vast majority of people who buy land for L$ and in world. Sorry, but before I began do land business the situation was very unfair. The small guy, or person who only can spend L$ but not US$ would pay much more for land in world than the big and experienced guy who would get 10000 sqm piece of land way below market value on auctions. I am acting for all the small guy in world, as their agent bringing them auction land in sizes they can afford at small margin



No. This would lead to higher land prices in world, less income for Linden Lab and thus worse service and it would only force realtors make alt accounts. Instead of high volume low margin realtor service you would see small volume high margin again, just as it was situation in June.

Very well said, Anshe!

Non land resellers would bid on these auctions and either use them for private purposes or slowly (hopefully slowly, otherwise they are resellers) partition them off and sell to other people.

This decrease to inworld supply would at worst inflate prices and at best keep them the same with the other problem being a singificant drop in liquidity and an inability to sell when you want to sell and buy when you want to buy.

The alternative to 'land barons' are 'linden land barons'. Same prices, same liquidity, but linden labs has simply hired them to work for them full time and the market becomes more rigid and more regulated.

Right, which would mean replacing efficient and competitive outsourcing with in house bureaucrazy and overhead of one company. I don't think Anshe Linden would cost less than Anshe Chung

Yes, absolutely.

Cause I'm pretty sure LL is not a charity and it's a little hard to believe they'd sell beneath market value.

Hmm .. which makes me wonder if LL loves land barons because it deflects all the blame that would go to them for high prices.

The $116 you see as being won in the only auction I ever participated represents my learning experience with land in SL. Janus, the sim that now lags so badly its still a toxic waste dump of time-dilated proportions, was where the land was claimed. It was dumped after the whole sim went to hell, quite some time ago.

It provided me with some valuable insights:

1) Land is a liability.

2) There is no insurance against actions of others.

3) The myth that you need land to experience SL to its fullest is false.

4) Value of land is what the perception happens to be, and those that understand this do their best to erode the environment in their favor, depending on buying/selling intentions.

5)Telehubs are cancerous lag-boils on the face of sims, due to the perception of 'traffic' influencing land price.

Very nice work Tiger, hope you keep it up.

As for the rest of this thread, well... my BS meeter borke a long time ago while reading this forum, so I can't really comment.

Edit to add: Tiger are you considering doing a long running history auction report? Would be interisting to see long term trends over time like this as well as recent reports.

In a world where anybody can create virtually anything given time and creativity, land is one of the few commodities with any semblence of scarcity. It's hardly surprising in a climate with no meaningful regulation that one or two people exert a virtual monopoly over the bulk of that commodity. A corporate ogligarchy with no meaningful competition is the natural end product of unrestrained capitalism. If you want the free market to stay free, you keep your monopolists on a very short leash... preferably with a muzzle. And don't forget to spay or neuter.