Land is cheap?
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Dark Korvin
Player in the RL game
Join date: 13 Jun 2005
Posts: 769
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09-11-2005 13:20
I want to show everyone this so you can realize how cheap land really is. I got this from this link: https://secondlife.com/community/economy.php Avg. L$-----Avg. L$/Meter-----/MeterIn-world ---Auction3.60--------- 5.854.37--------- 4.804.56--------- 5.414.44 ---------5.264.15 ---------6.09 If you read the legend on the page, you will see that the Auction side only takes into acount the price paid in the auction, not the resale of the property. The In-World side includes the resale of Auction land. This means that the average peice of land automatically DROPS in price as soon as it leaves Lindne Labs. Why does this happen? It happens because supply increases every time an auction is won. Why do people buy at auctions? People buy at auctions when they thinks the price of land is rising enough that they can make a profit, or when they want to actually use the whole sim to do some sort of project. In other words, people who buy at auctions are why your land is so cheap! **waits patiently to be jumped by all those that still think it is way overpriced**
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Flyingroc Chung
:)
Join date: 3 Jun 2004
Posts: 329
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09-11-2005 16:46
I think the stats for in-world land sales include land that gets sold for $1. For example, many people would sell grouped land to themselves for $1 before setting it up for sale to the general public, so that the sale would not be distibuted among the group.
This practice would skew information, shifting average land sales to the cheaper side, when the land transfer shouldnt be really considered a sale.
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Ellie Edo
Registered User
Join date: 13 Mar 2005
Posts: 1,425
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09-11-2005 16:55
Probably includes first land at $1/m too. Tiny percentage though. Though the figures would need corrections for these two effects, I think the broad point is valid. I've just been thinking about this in another thread. I think perhaps we have not realised the extra emotional desirability of new, clean empty land on first sale by the baron. I think it is a third category. Land at auction. Land at first sale while still relatively clean. Land on normal resale, with mature builds all round it. Here's my thoughts of five minutes ago, analysing this "pioneer land premium" effect: /130/29/61030/2.html#post639638I've not heard this possibility discussed before, though I probably missed it.
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Dark Korvin
Player in the RL game
Join date: 13 Jun 2005
Posts: 769
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09-11-2005 20:55
Good points. I have some better raw numbers. Flying around, I found that much of the land that was auctioned at around 4.5-6$L / meter2 was marked up to about 6-7$L / meter. Every now and again I do a statistic on about 75% of the land for sale. I leave off the very top numbers, because I find alot of these prices that seem too extreme to be actual sales. Things like $L500/mete2r just don't seem a likely sale when the same type of land is available for $L10/meter2. Last week the average sale price of land was $L6.9 / meter2 and the standard deviation was $L1.9/meter2. This is only the statistics for the land for sale and not the statistics of what is actually being bought. The only thing I can tell you with these numbers is that the listing price of auctioned land is not extreme compared with every one else. I can tell you from my own experience, that I seem to be able to sell more land the less auctions have gone on recently, and I tend to have to sell at slightly lower prices when huge amounts of auctions have gone on. My numbers of personal sales are only a very small sample though, so I doubt they are characteristic of the entire population. My numbers from the chart have been pulled out from under me, so now the only argument I have left is that auction sellers don't sell more than others.  May not be as big a consolation, lol.
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Khamon Fate
fategardens.net
Join date: 21 Nov 2003
Posts: 4,177
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09-12-2005 05:17
From: Dark Korvin People buy at auctions when they thinks the price of land is rising enough that they can make a profit, or when they want to actually use the whole sim to do some sort of project. Do you have any examples of someone buying a project sim at auction? I've only been able to identify resellers since the whole sim auctions began.
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Dark Korvin
Player in the RL game
Join date: 13 Jun 2005
Posts: 769
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09-13-2005 17:16
It is obvious from the buyer names on most sim auctions that a large majority of the sim auctions go to land sellers. I don't know how long it has been since someone has wanted a sim bought from auction for personal use rather than a private island. There are some buyers I can't guess on their intentions, since I've never heard of them. I guess if you wanted, you could question them. I'm not in the mood for interviewing right now. My mind tends to revolve around numbers, so sometimes I miss things that aren't shown in numbers. I still can't find any logic for the argument that auctions might cause a huge mark up on prices. I just can't find something that constantly increases the supply of land causing price to go up unless the auction would cause greater demand for land. Ellie made a good point that people might be more willing to buy "pioneer" land, which seems to be true from experience. Would this really raise the price for overall demand though, or just the demand for land freshly auctioned? If someone could point out how auctions could raise prices across all land, I would be interested. Are people just upset that they have to buy their land used? My question to those that are concerened with land sellers buying auction land, is are you upset that the new land is not easier to obtain, or are you thinking all land is more expensive because of this trend?
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Ellie Edo
Registered User
Join date: 13 Mar 2005
Posts: 1,425
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09-14-2005 02:40
Interesting. If I introduce even an infinite supply of a commodity, at a price lower than the market rate, that will bring the price down. Which is what seems to have happened.
The infinite supply at US$1000 stops the all land prices going up. The minimum selling price stops the auction price going down, but of course the non-auction price can go down lower. So it is a price cap (subject to resellers margin and small competitive variations for specially valuable sims).
Plus, of course, the fall in the L$ has exacerbated the drop in real terms (ie US$ terms), damaging confidence in land values still further, increasing the flight from land, and from L$, and so on round the loop.
What we have now is a crisis of confidence, and in the short term LL should deal with it on its own terms. With a big, convincing announcement.
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Buck Weaver
Unsolicited Onterator
Join date: 18 May 2003
Posts: 251
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09-14-2005 03:27
It's even cheaper than that, if you know the right Linden, and you can get them to "hold" land for you for nine months and then sell it back to you at below market price when you are ready (for the purpose of griefing the neighbors) to own it again .
More to come.......
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Eggy Lippmann
Wiktator
Join date: 1 May 2003
Posts: 7,939
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09-14-2005 07:15
Land is not cheap. Heck, land should be free for all I care. I've had websites based on free hosting since the dawn of time. One of them has been up since 1996, when I was still in high school!
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Ellie Edo
Registered User
Join date: 13 Mar 2005
Posts: 1,425
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09-14-2005 10:48
From: Eggy Lippmann Land is not cheap. Heck, land should be free for all I care. I've had websites based on free hosting since the dawn of time. One of them has been up since 1996, when I was still in high school! Eggy - you can host 60000 websites on one server. But only one (or at most two) SL sims, on a server costing the same amount to buy and run. There's the difference.
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Eggy Lippmann
Wiktator
Join date: 1 May 2003
Posts: 7,939
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09-14-2005 10:58
In 1996 you couldnt, and it's not my fault if LL has a flawed design that is overly ambitious. If SL is supposed to be primarily a social environment, it doesnt need to be a technological masterpiece, and in fact, LL's "tekki-wiki" attitude detracts from the social experience - SL is generally regarded as ridiculously complex by the non-technical majority, and has insane hardware requirements that preemptively exclude most people from using it, namely, those who buy brand-name PCs with embedded video chips from Intel and whatnot. People were perfectly happy with There and TSO you know. If LL isnt careful they will lose out to IMVU and whoever comes around next.
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Dark Korvin
Player in the RL game
Join date: 13 Jun 2005
Posts: 769
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09-14-2005 21:02
From: Ellie Edo Interesting. If I introduce even an infinite supply of a commodity, at a price lower than the market rate, that will bring the price down. Which is what seems to have happened. The infinite supply at US$1000 stops the all land prices going up. The minimum selling price stops the auction price going down, but of course the non-auction price can go down lower. So it is a price cap (subject to resellers margin and small competitive variations for specially valuable sims). Plus, of course, the fall in the L$ has exacerbated the drop in real terms (ie US$ terms), damaging confidence in land values still further, increasing the flight from land, and from L$, and so on round the loop. What we have now is a crisis of confidence, and in the short term LL should deal with it on its own terms. With a big, convincing announcement. I agree fully with you on the crisis of confidence. Their first few announcements do not seem to have helped, but I wonder if some people went into a panic from lack of understanding the effect the changes will have. In the long run though, I think the market will regain confidence as the changes start actually effecting things. The more they change at once also brings the danger of the $L bouncing up uncontrollably. That would be just as damaging in my opinion.
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Dark Korvin
Player in the RL game
Join date: 13 Jun 2005
Posts: 769
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09-14-2005 21:11
From: Eggy Lippmann Land is not cheap. Heck, land should be free for all I care. I've had websites based on free hosting since the dawn of time. One of them has been up since 1996, when I was still in high school! I hate to tell you this, but the idea that things should be free never works in the end. Even your free web sites are supported by someone's money. If you aren't paying for it, advertisers or some other benifactor of the company's services are paying for it. The same thing happens with land. You don't want people who own land to have to pay for it in auctions or teir fees, then you will have to get people that don't own land to somehow pay for Second Life's existence. That is right, people that don't own land will have to somehow increase their fees by hundreds or thousands of US$ (I don't see this ever working out), because you don't want the land owners to pay money. The more money paid by land owners, the less money everyone else has to pay. This is just the way things work in the world. Why does land cost money from residents, because it cost a resident money to buy the land from Linden Labs. People are not just going to give you something for free that they spent US$1000 on. I'm sorry.
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Angel Coral
Otherworldly
Join date: 12 Dec 2003
Posts: 224
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Not all land is cheap!
09-15-2005 14:39
One land baroness is selling or has recently sold two plots of land in the sim I live in for 20 and 30L/m2. Yes, it is a telehub sim but still it's rather insane. Needless to say, the plots aren't selling fast. I've been there since early 2004 and all I can do is laugh and wait patiently for the price to correct itself or some poor ignorant player to buy it and resell it at a terrible loss. Patience wins out every time.
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Essence Lumin
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Join date: 24 Oct 2003
Posts: 806
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09-15-2005 17:21
From: Dark Korvin I hate to tell you this, but the idea that things should be free never works in the end. Even your free web sites are supported by someone's money. If you aren't paying for it, advertisers or some other benifactor of the company's services are paying for it.
In the case of free land it would be the land tier fees you have to pay every month for it.
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Dark Korvin
Player in the RL game
Join date: 13 Jun 2005
Posts: 769
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09-15-2005 17:26
From: Angel Coral One land baroness is selling or has recently sold two plots of land in the sim I live in for 20 and 30L/m2. Yes, it is a telehub sim but still it's rather insane. Needless to say, the plots aren't selling fast. I've been there since early 2004 and all I can do is laugh and wait patiently for the price to correct itself or some poor ignorant player to buy it and resell it at a terrible loss. Patience wins out every time. Well if you are right, and the land is not worth that amount. Then the baroness you speak of will pay dearly in teir fees. You don't really lose anything by some land not selling. Some land not selling just means that people are sending more money toward Linden Labs than what land users do. More money at Linden Labs could makes it easier for them to do things like offer free acounts or the $10 basic membership. You can alway get land for 2.0-4.0$L/meter2 easily if you want. If you look, not all of this land is undesirable, ecspecially if you are just looking for home. For instance some of the cheaper land that is 1000 meters away from the telehub can be reached instantly by you if you set your teleport home, and is less likely to see a large crowd bog the sim down. Not always the case, but there is land out there cheaper than the minimum 4.36$L/meter you have to pay Linden Labs to buy at auction.
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