Where will mainland prices go to ?

Wait until Feb, then you see empty islands when people start dropping out. If you though land was at a alltime high. You have not seen anything yet!

That statement does concern me. Economic theories aside, one of the reasons I came to SL was the breadth and depth of creativity in world.

I hope what Darkness Anubis talks about does not happen as it seems to me that SL will be much the poorer for it.

It just occurred to me that LL is artificially propping up land prices by intervening in the LindeX market. By selling so many L$ every day, they are keeping the value of L$ low as compared to the US$. This implies that L$ would be worth more if LL wasn't intervening.

It seems to me that land speculators would have no need to raise land prices if they could profit simply by buying at, say, L$15/m2, and selling at the same price two weeks later. They could be hoping for a profit in spending for example L$8,000 for a 512m2 parcel when L$8,000 is worth about $30 (L$266:US$1), then selling when L$8,000 is worth $40 (L$200:US$1).

I realize LL's position is complicated in that they have several different financial roles in SL. "Outside" SL they take in fees for Premium membership. "Inside" they act as a large government, selling large parcels of newly-created land to private parties (equivalent perhaps to a government selling previously uninhabited Federal land to large developers), taxing real property ("tier", subsidizing citizens ("stipends", taxing creativity (fees for uploading textures), and minting currency. In such a scenario, it can be problematic to try to address a problem via one route (e.g. releasing more land) while correcting for the "solution" via another route (e.g. spending more L$ in purchasing US$). In RL economies, "unintended consequences" can be annoying or even devestating.

Is there a group anywhere devoted to understanding the SL economy as a whole? I'd be interested in learning what the professionals are seeing (or at least those with more training in economics than I've picked up).

When? And Or IF? People are basing their understanding on the way the game use to be. Not for what it is now.

@Finora:
You are new to the forums.
You come off a bit strong, a bit too strong for the forum guidelines. You can't attack the other posters, or you will be branded as a Troll. The gods will not smile fondly upon you if you trolling or flame in the RA forum. Please read this.

I have read these comment with some interest cnsidering I am a land owner. This month I will be paying $70 for what I have bought. Frankly, I was a bit stunned when I saw what I had done but I still think it is a bargain. I am frequently on SL and I have many friends here. I have even found a partner here (an SL partner, that is). I can talk for as long as I wish with people all over the world and I can build houses and play all day long. We have to always remember that we are not talking about thousands of real world US dollars but Lindens. In the real world all successful games come with a price. And demand raises the price of everything. It is as simple as that. If this was not the case, Second Life would have been called "Utopia" - a place that does not exist in the real world or on a laptop computer.

One thing to note about this is that it wasn't too many months ago where the the L$ value was closer to L$400:US$1 and the Lindens have done a great job in strategizing things back to its current strength.

One of the notable factors, imo, was the creation of the much hated freebie accounts. By opening the doors to more people who turn into consumers, and from everything I've seen as a content creator, land owner, mall proprietor and now private estate owner/manager, they do indeed turn into consumers. They may not be able to, or choose not to, get L$ via the lindex and stipend, but they do get them. Ebay, SLExchange whatever the source, they get them. AND they can own land on a private estate. I just helped someone in that situation set up on SkyBeam. "Wow, I own land just like a premium member."

Other factors in strengthening the L$ value have been lowering stipends, doing away with traffic 'awards', and so forth.

When I started the game some sixteen months ago, the target value of the L$ was stated to be about $L250 per usd. I'm still seeing a slow adjustment back in that direction and its worth bearing in mind that trying to move the value too quickly can result in some really bad repercussions. I'm guessing we'll continue to see some careful adjustments in the amount of L$ created (stipends, new lindens sold via exchange, etc), to try to slowly get to that same value.

Conversely, you should probably bear in mind that while a stronger L$ is really good for the the content creators who sell L$, it makes purchasing lindens for the pure *consumers* that much tougher, often with the L$ going less far, not further. That L$ 1800 gown, in your scenario, goes from us$ 6.75 to $9.... erm.... just a little bit more expensive.... Yes, the seller could lower the price, but would they?

As for the original mainland prices question... the current bubble could last as long as on into summer, when a normal slump or slow down in sales and land purchases is to be expected. The raise of private island tier to 295 has created a huge disparity in the APPARENT value of mainland.

My big concern for people is that they are losing sight of how much more they are spending up front to save a little bit of money every month, relatively speaking. If you get a 4096 lot at $18 per m2, you're going to pay around usd $275 with a $25 a month tier, with no guarantees of what is going to move in next to you, be it a casino, a store with huge rotating possibly x rated signs, or a laggy club or a sim lagging collection of camping chair/dance pad/etc, or any combination of the above. One 512 or 1024 lot in a sim packed with camping/dance devices can bring an entire mainland sim to its knees... the price of 'no rules'.

Compare that to $28 a month on one of sims with a buy in of $L 24,576 currently and you know you're on a class 5, fast, with no camping/casino/club lag fests allowed and some nice public spaces for residents to use, not to mention access to a 1/4 sim sandbox with no time restrictions as an added perk.

Even, if I now buy a new sim at new rates, a much higher buy in of L$ 32,768, still *half* the mainland buy in, but with a tier of $36 a month compared to the $25 for mainland. That $11 a month! OMG! I can't do that! But by paying the original $18 per meter for the mainland lot, it'll take 10 months before you've 'saved' the additional money paid up front. 10 months in SL is the equiv of two or three real life years, or that's how it feels.

In a well run, well managed private estate, the value of the land should stay pretty stable. In your 4096 lot, buying now, if you decided in a month that the new whatever next door makes life intolerable and you want out, what happens if you now find values are down to $12 a meter and you're going to lose money there too? You might get lucky and the bubble continues and you make money, you may not.

I made the move for private resident to private estate several months ago and from that point forward, I would never consider moving back.

I have a mainland sim I run a mall on, so I'm not anti-mainland. It has its place, especially for those people and businesses that can't or won't find a home on a private estate.

Its really really tempting to sell the whole sim now while I can make a huge amount of money off of it. But, I've seen what SL as a whole has done to a mainland sim I've owned prior and my heart pains when I see it so I don't think I'll be going there. Instead, I'll take the rest I've bought out and expand the mall and keep it as beautiful as Pando Square has always been, just on a larger scale with more 'community' space; a frozen pond to skate on, some places to sit, maybe a semi-secluded pavilion to steal a dance with someone and alway always the best ice sculpture collection (that I'm aware of ) in SL.

Ok, I've prattled on and probably totally lost everyone by now, so I'll hush. But there's a whole lot more to all the issues than just simple statements like 'land is overinflated in price' and 'the Lindens are artificially propping up land prices' or even that buying into private estates is too risky or that you should never buy in where there's a covenant or that mainland is the only way to go because its the only place you can do whatever you want.

All the decisions need really careful consideration. You have to know what it is you really want from whatever purchase you make, what the end experience needs to be for you and you have to understand what you're spending today to save tomorrow and if those numbers really make any sense.

I hope everyone has a very happy, prosperous New Year!

Char

Many people have also other entertainment than SL, so that is one reason why $70-$195 dollars a month for SL feels quite a lot. And of course people compare prices of entertainment. And many people still play ordinary games besides SL, because the games are far superior to SL as plain ordinary games. And many ordinary games have online stuff too. Surely you can play SL free or with tiny cost and just have fun "island jumping" around and build your own clothes and just use sandboxes. There are lots of events in SL where you can see things quite cheaply. Or you could be happy with a smaller land plot - that is if you succeed to get your land from a neighbourhood that has a overall environmental style that you like.

But isn't it so, that while LL is not directly controlling land prices, they control and affect the price of owning land more or less indirectly?

1) LL controls the value of money with which you buy and sell land.
2) LL releases new land when it suites them, and all new land is supply, that affects the prices of free market land. If LL released more land all the time, then people would always have the option to buy at LL price, which of course LL would set directly, be it market price or not. LL price could be set in an auction, but that is the choice of LL to auction or to sell.
3) If someone abandons land, it pops up for sale at LL price. If the price is cheap, lucky the guy who gets the land.
4) LL sets the land tier fees, though which is not part of the land price, it still affects the overall cost of land ownership.
5) LL sets the premium account fee that adds up to the overall cost, but which can be avoided when rentbuying from a private island.
6) LL also decides the prices and fees of private islands.
7) The LL policy, that island owner can eject rentbuyers from the island, affects the decisions people make while pondering whether to buy land from islands or from mainland.

Of course LL must set some price to land in some phase or they would not get any money at all.

Also even more indirect:

LL creates the mainland in the first place, so they have the possibility to decide will they create more highly valued forest beaches - or less valued really steep mountain edges where sun does not shine.
9) LL policy of creating or not creating public parks between land and LL policy of whether there are any property prettyness covenants on mainland effects the overall land value in the mainland neighbourhoods.
10) The more effort LL puts into the game, the more money they need to get from it. More effort might lead to higher initial land prices and higher fees. Though if there was some brilliant but cheap effort solution, then the prices could be dropped even while more residents poured into SL and LL profits soared up.


And I think that because land prices can fluctuate in the market, people will always talk about the prices. If the prices fluctuate more, the more talk there will be. If there is no fluctuation at all, people will talk why there is no fluctuation. If the prices storm up and down, people will start taking evacuation measures.

Its like talking about weather. If the weather is bad, people hope better weather. If the weather is good, people will say "nice day, isn't it". If there are countries where the weather is really bad all the time, people will move to countries where the weather is better. If there is a country where the weather is really good most of the time, that country will have lots of residents.

By the time you see that in P/E terms, it will be too late. The Early Adopter models you talk about are out of date by at least two economic cyles and arguably, four. The defining technological references for Second Life are not boo.com or lastminute.com (which has some novel background to it, I thijnk it's safe to say...): it is rather the rise of IM and SMS technologies, neither of which were predicted by P/E happy analysts, and the growth of Demon Internet, which was started by Cliff when he had a stockpile of unsellable PCs and a hunch. He didn't worry about P/E: he just did it.

It seems very plain to me that a corporate presence-maker on SL will be mildly conflicted; Islands might not scale very well, and mainland has a certain familiarity-of-concept. It seems to me that buying mainland might bring one to the attention of people with deep pockets, a bit further down the track, provided (he added ruefully) one doesn't buy a parcel with a paranoid hippie holdout queen chopping off one side of it...

What is teh sell rate from linden to Real monies now? has it stop falling?

Good post, Kratax.

It's really surprising how many people in SL feel that a free market for land is not the best way to go. Ever taken an econ class? Supply and demand dictate price.

LL has been doing a good job of pumping out new mainland sims, which has slowed the rise of mainland prices.

Seems like some people want to see the land market collapse. Sounds to me like they're mad they missed the boat. I doubt you'll see a collapse in mainland prices, at least not a dramatic one. LL wants to keep the economy stable and growing. They don't want to crash the land market, as land barons are among LL's biggest customers.

I've only been in SL for about 4 weeks now, so all I know about what land prices used to be, is what I've read on the forums. Just in the time I've been around though I've seen the prices double, which I found pretty amazing.

Still, I have no complaints. It costs what it costs. I'm in SL to have fun and I don't mind spending money on my entertainment, if I feel said entertainment is worth it. I couldn't find any first land and when I wanted land I didn't want to wait, so I plunked down just under L$5000 for a 512m plot on a mainland sim. It was worth the roughly $20US to me to be able to have my own little piece of SL to build on and call 'home'. In only about 10 days, the price of a 512m lot in my area had doubled, to L$10,000. Prices have stayed there since then, so perhaps they are levelling? Anyhow I could have put my lot back on the market, maybe I'd have doubled my money in only a fortnight. But I didn't buy land as an investment - well not a monetary one. I bought it for fun and entertainment.

And I've enjoyed that SL-based entertainment so much that I wanted to build more and have a higher prim allowance. Now I own 4096m in that sim and although it cost quite a lot, I have a great big home, lots of primmy 'toys', and enough of a prim allowance left over that it's my own private sandbox. To get a single large chunk of land, in the same sim, in a nice spot, I was willing to pay the L$20/m.

It costs what it costs. Either we think it costs too much or we don't. But 'too much' is, I think, a subjective thing. If it costs too much to you, then don't buy. But someone else might be willing to pay the price, and if they are, that means it wasn't overpriced to them.

As for me... Personally I think the monthly tier prices are a bigger deterrent than the initial purchase. I'd have been contemplating a private island if not for the monthly tier. The up front purchase, I can justify that in my mind as a big splurge, one time occurance, like a vacation or something. It's the high monthly costs that break the budget. I'm now at $25/month tier and that's as high as I can afford to go. And if SL changes the rates or the rules on tier then that's a much more significant impact to me than the fluctuations of the land purchase itself.

-Atashi

Whoever moderates this forum, please pass the above post on to your supervisors. It is by far the most important subject and by far the biggest concern in the whole game. If I were in charge, I would devote 99% of my resources to improving performance. Then maybe some of the content creators who made SL the amazing and fun game that it is, like Starax Statosky, will return.

just for statistical reasons

10-12 days ago I had count exactly 20 pieces of land (greater than 8k meters) with prices from 14 Linden/meter to 16 Linden/meter.

Today I did the exercise again
21 pieces of land with prices from 17 Linden/meter to 19 Linden /meter
With the lower priced parcels on snow or on slopped hills.

It has been said already where the prices were 3 and 4 weeks back

The trend is obviously remaining upwards. And as Linden said in one resident question, Linden treat Land market as a free market (even though they control supply).

There is a kind of shortage in the market for big parcels of land since it's a habbit of splitting land on 512 ans 1024 plots for maximizing profit, so the remaining big plots becoming more rare actually.( and there are people out there who want that bigger plots of 8k meters or greater)

Stabilization of the market still remains a question. The only strange behaviour is that from latest mainland sim auctions the most known player seems to be missing. That might be an indication, since this player usually grab mainland auctioned land and set it up for sale. But this is maybe due to Holidays season, or my fault in reading the names.

With these data and current increased number of users (each and every 7 day period) I would expect that prices might go upwards a bit more and stabilize around 20+ L/m for the next couple of months. (just my personal feeling, might be quite wrong)

As someone noticed in the start of this thread, 3 years back prices were extremely high and then linden gave too much new land and the prices went down drammaticaly. But we have to think if that's the case of what is going to happen, that then there were no more than 100k to 200k users and sims in dozens. Today we are talking that Lindens should bring up at least 10-20 new sims every day for the next month as new land and then we might see a stabilization or a price decrease.

As for what is considered cheap and expensive is something so subjective. I remember back 3-4 weeks when I bought some few plots of 8k land and I thought it was expensive to give more than 85k to buy an 8192 plot. 2 weeks ago I bought 1 with 125k. With the market prices back then it was expensive. 2 weeks ago it was cheap.

I am trying to find the indications that a crash is near , but except Linden Labs can't stand the outstanding growth, I don't find many.

The person I believe Brazil was referring to was very active in auction bidding before the holidays, using an alt. Suspiciously, this persons website doesn't list any of the land won in said auctions.

As for where land prices are going, I thought we would see a gentle pullback this week, continuing on from the recent stabilisation. However, despite me attempting to price my land somewhere in between being considered overpriced and being considered a bargain, I'm struggling to hold onto any of it for any length of time.

and the rash of turning 512 or 1024 plots into 16 m2 plots is not new? Those things are breaking out like a bad rash.

You are right stephen. I just don't know if the player uses and how many alts and under which names.

The only reason I make reference to this player is because is considered to be one of the big players and might have a better picture of what is coming or not. So any absence of them from their usual habbit might be an alarm for some people .

I don't expect to see any of the major land dealers remaing active on the mainland. It's a trainwreck and getting worse. The 'sensible' money seems to be busy setting up as many island estate sims as possible and renting them out.

What do you call Anshe Chung and CP Costello? Mainland is where the land barons reign supreme. It's THE land for speculating. I'm curious why you view it as a trainwreck, because anyone investing in mainland over the last few months has made big money.

Most land renting is done on private islands (not all). Mostly due to people want that extra security of having a private home that is better secured then what they could buy on mainland and are willing to forgo some of the other perks paying LL would give them. Most main land buying (by land agents) is simply to buy and resell. For those that don't have the cash to buy a Private Island but want to get land they can buy it from them.