Second Life Land Market is Weird

In Second Life, prices go UP the more land you buy. I'm not talking tiers, I'm talking buy price.

If you search for plots of land less than 4000m, you see a LOT for L$4/m and less. The bigger the plots of land get, the higher the $/m goes up, with large pieces of land selling for L$6 and L$7 per meter.

What's up with that?

I'm in the market for a large piece of land, 16,000-25,000 meters and I'm actually being penalized by the land sellers for wanting more land. I don't get it. I can't win any of the auctions because I'm outbid by the same regulars all the time. I can't buy the large plots in-world because of the artificially inflated prices on larger plots... what am I to do?

Aaron

I've noticed this too. Very odd.

I think it arises since we cannot buy land wholesale ->
People want larger contiguous plots, which are harder to aquire.

-Adam

It's because of the tier fee, not because of the limited supply.

Basically, if you can afford to pay 25$ a month, 6$ per m2 isn't much to pay.

It'll probably start going down again in price as you get around 65K though, especially when you take into account the auctions.

Ive noticed this too, i list out 2-3 times before i actually got a big plot of land from auction

Aaron, I've got a 15ksqm plot in Moen you can purchase

I know! I was in the market for a 4096sqm plot just before land prices came down and it was the same. But it seems to peak in other weird places too...

I think its simply a matter of supply and demand. There are relatively fewer larger-sized plots, relative to the number of people wanting them.

There are tons of smaller lots in the 512-2048 range, in large part because of the First Land program.

- Ace

I really hope it isnt for the reasons Blaze stated. If so, I think all you content baron types ought to tier price your objects and clothing!

New Outfit from PixelMews!

Pricing as follows:

People with < 5k in their account: L$250
People with > 5k and < 10k in their account: L$300
People with >10k in their account: You bastages can afford it, so L$500.

I won a bid two months ago, 4096m for L$16,000, works out to L$3.90 a meter. It was PG land, but thats what I wanted. I think you have to look at margins that are being set and go from there. Most of the land around me went up for sale immediately in the L$6 - L$8 per meter range. I wanted the land to settle for myself and was prepared to pay L$6 a meter for it, but I didnt have too. The regulars wont pay more than they can resell it for. It can be frustrating dealing with auctions, just study the prices being paid on winning plots and be prepared to pay a reasonable price on land your bidding on.

the sl land market IS weird. it's doesn't conform to our normal maketing concepts. jarod says that it's a whole new paradigm of business.

consider that ll keep pumping out new sims when a third of the map if for sale. that makes no sense. well yes it does. they're collecting tier fees from somebody even when the land is for sale. they won't stop rolling out new sims until we stop buying them. what that does to the land market and prices is wholly irrelevant to them. they only have to worry when loads of land are being released, and not repurchased, when put on the block. that'll only happen when people start leaving en masse. anybody leaving? i didn't think so.

normally when you buy things in bulk you pay less per item. but that doesn't apply to sl land purchases. these higher prices for larger parcels is also a tier feature. ha ha yes i called it a "feature." land brokers think in terms of covering their costs, then netting a profit. larger lots auction for more money, i've no idea what causes that phenomenon, and require higher tier fees.

actually, they get discounted tier fees. and they have the luxury of sharing that allocation between groups on a weekly basis. but they have no impetus to pass those savings on to their clients. this does not reflect what we consider normal business practice in the real world. but it's accepted in second life without reservation.

people that understand these oddities are making small fortunes. people that don't, aren't.

The offering price for some pieces of land is not what it really sells for.

There are not many buyers for the really big pieces. Most buyers want buy small pieces, or combine several small pieces to one bigger piece that is the exact size and shape they want.

So quite often some big land owner first puts land for sale in one piece. Then it sits there for days or weeks and nobody buys. Then finally he sell to realtor who parcels it off and offers it for real market value.

If you want to buy large piece of land for normal market rates IM me and I can send you to some places where I have large area for sale (not in one big piece, but many small pieces that you can buy and combine the way you want)

Oh, and one more note: there is always one handful of 512sqm pieces priced below market. But they simply don't reflect market price. They are either priced too cheap (congratulation! you found bargain!) or they are in bad location, such as between two big builds etc.

I believe its a supply/demand thingy.

512m plots of land move faster. Quicker sales. Higher turns. Less margin. Volume.

Larger plots of land tend to sit for awhile until purchased. That means higher tier costs. Longer sales. Less turns. Specialized sales.

Just my two.

the answer is quite simple... it is significantly harder to get large contiguous usable plots of land in SL than small ones. you can find hundreds of 512's for sale all over... try finding 16k sqm plots though you will only see several and the chances of any of them being 'the one' perfect plot you want are pretty low.

its taken me months, heck at this point even over a year, to acquire about 90k sqm of contiguous mainland old sim space bordering the welcome area... i would think that overall.. this land is probably per sqm, worth alot more than some random 'first land' plot buried between two night clubs somewhere out in the snow sims. why? because of what you can do with it.

You can do *ALOT MORE* with large contiguous plots, build wise, than you can with small ones. You can run an entire theme area, or large social build etc, that adds value to the land not present in little snippets and squares here and there....

essentially think of large scale plots as 'commercial' real estate versus 512sqm plots as 'rural' real estate... when buying RL land, you will pay alot more, per acre, to get large established areas near existing development than you will for 'random' small residential zoned lots out on the far fringes of a county.

land is one 'commodity' whos value goes up the more of it you are selling... assuming someone else will be interested in buying of course

For someone who constantly praises Anshe, this is a very interesting topic coming from you, Aaron.

Nothing unusual about large parcels being more expensive.

You're using a bad model. SL is physically really very small. Much more like downtown New York City even if some of the terrain appears "natural" - it is a lot of dwellers in low space.

You'll find in a big city that getting a large apartment is proportionately cheaper than a small one. An apartment of 2500sf might be $1900 a month, but an apartment of 14000sf might be $120,000 a month. There is some exception for loft spaces because they are somewhat undesirable, but as soon as they are made desirable they become very expensive.

The reason is that scarcity drives market demand, and contiguous property is scarce. Since all property is basically equally desirable except for features like snow, and can be modified fairly quickly and cheaply (i.e. no need to invest two million to upgrade a warehouse to living loft) the only factor affecting the SL market is scarcity.

Haha, a lot of analyzing.

Plausible

I've studied macroeconomics... you've got it reversed.

If something moves easily, you RAISE the price as it has a HIGH demand. When the price is raised to a point where the demand starts to drop, you halt raising the price as you have found equilibrium.

If something is not moving easily, you LOWER the price as it has a LOW demand. When the price is lowered to a point where the demand starts to raise, you halt lowering the price as you have found equilibrium.

What stumps me is that if the small plots move so easily, why don't land barrons sell more larger sized plots?

It's clear equilibrium is out of whack on land sales.

If your only looking at one factor? Sure.

But you also need to factor in supply and demand. Lots of 512's, few 16ksqm's. Land baroning is a low-skill job, therefor, there is very little barrier to entry in the market. Lots of competition. With the bigger plots, there is a bigger barrier to entry: high tier fees, additionally, the lack of supply (LL releases more 512's than equivilent sqm in 16ksqm parcels) - and 'first land' plots (which raise the 512m supply again).

-Adam

I don't know if I agree with your logic.
Although there are higher tier fees, it is also cheaper per sqare meter.
And they are still in demand. Raise the supply until the balance is reached.

If there's a glut of 512 plots then obviously the demand for them will be down. So why sell so many? Reduce the supply until it balances with demand.

it's not like the supply is set. Barons can choose how big the plots they split are.

No, the supply is fairly set, barons can sell at size-or-lower. Usually never able to join a plot into a contiguous landmass. There is also a probable percieved demand for 512's, being that it is the modal tier.

Ah, I miscommunicated.

Certainly, the supply of all land is set. However, supply of the sizes is, as you pointed out, up to the resellers to choose what size to sell. Barons could sell more of the land as large-size, and less of the land as small size.

My victims can't buy really big pieces. I sell only small pieces, so people must recombine several small pieces if they want a large piece.

So quite often Linden Lab first puts land for sale in one piece. Then I tenaciously outbid other players. Then when I win it, I parcel it off and offer it at monopolistic prices.

If you want to buy large piece of land at these inflated rates IM me and I can send you to some places where I have large area for sale (not in one big piece, but many small pieces - each with their own sign - that you can buy and combine the way you want). My "retail" pricing at wholesale volumes

Oh, and one more note: there is always one handful of 512sqm pieces priced below my rates. But they simply don't reflect my prices. They are either priced too cheap (congratulation! me love you long time!) or they are in bad location, such as between two big builds etc.

I don't see anything weird about the Land Market. Like way system work just fine I do. This one a long time have I watched. All his life has he looked away... to the future, to the horizon. Never his mind on where he was. Hmm? What he was doing. Hmph. Adventure. Heh. Excitement. Heh.

I think I love you, Malachi

An interesting byproduct of all the "carving up" of large auctioned plots that goes on is that the Find tool becomes useless when looking for a specific size of lot. It is possible to go buy 16,000m2 of continguous land being (re)sold in a new Sim, but you'd never know it from sorting Land For Sale by area.

I guess that really does encourage people to IM a "reseller" instead.

(<NotAd>Oh, and I find land for people for free to save them the flight times, and no - it's not land that I'm selling myself. See my web site for details. This is not an ad. I make no money from this service. </NotAd>