Reuters: Increased supply spurs fear of Second Life land glut

New article at Reuters:

http://secondlife.reuters.com/stories/2007/08/01/increased-supply-spurs-fear-of-second-life-land-glut/

By Eric Reuters

SECOND LIFE, August 1 (Reuters) - Newly created land in Second Life has outpaced population growth in recent months, resulting in a bigger and emptier virtual world. And with no signs of a slowdown in Linden Lab’s virtual land factory, Second Life property magnates expect land prices to fall further due to the ballooning supply.

According to Linden Lab statistics, there are 494 square meters of land in Second Life per premium account (only premium account holders can own land), up from 404 m2 in February, an increase of 22 percent. Based on residents who have logged in within the past 30 days, there are 43 m2 of land per resident compared to 26 m2 in February, an increase of 66 percent in virtual space per capita.

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(see link for entire article)

Just as an aside, number of square meters per premium membership may not be an accurate indicator, as its possible that a smaller proportion of the population are "direct" landowners (and that trend might continue), and an increasing number are non-premium members that rent from them (includes "owners" of subparcels on island estates, who i don't consider "direct" landowners).

It's also possible that meters-per-resident is not a big concern if the average resident ALSO uses a larger parcel than in the past, so that former 512 owners are no longer content and instead now have 4096 parcels. A trend I would also expect to continue irregardless of prices, and actually a positive trend rather than negative.

However, I personally suspect the conclusion that land prices are destined to *eventually* decline, may be correct even if I disagree with the method of reaching that conclusion.

I also suspect Anshe Chung is a pretty savvy source of speculation on where land prices will shift:
Luckily I hear Sarah Nerd Still Buys Land ^_^

Personally, I expect that many supporters of SL don't necessarily see falling land prices as a negative thing. Unrelated to whether they are "land investors" or not.

It may just be an evolutionary shift. Possibly even a planned one.

So far the reality is the market is holding steady, despite the "glut". With 35 sims to auction and casino owners coming up on their tier dates, we may see things head south over the weekend. It all depends on how many fearless land brokers are standing by, looking to buy low and relist higher. If they have tier to burn, they will be snatching up the bargains if there are any to be had.

OK, couple of things
a) More land per person than there was in February? No sh** Sherlock, prices also fell from 16/sqm to 10/sqm.
b) To most of you falling prices is a great thing. Obviously as a land trader it's slightly annoying to me but certainly something for the greater good.
c) Sims released per day is lower, much lower today than it was in March, April, May. Total sims released in Feb: 209, Mar: 304, Apr: 298, May: 229, Jun: 128, Jul: 147. And all indications are that it will be staying at this new level. Why would they stay at this new level...
d) ... because prices haven't moved an inch in the last two months.
e) Way to go Anshe, you stopped buying land in November? You missed the greatest period of profits ever in the history of land trading. Followed by two months of perfect stability.

*edit: I'm very very excited to read the quote from an LL employee saying that they handle sim auctions with the express purpose of maintaining price stability. it proves something that Ray has been saying all along.

I don't think that story is accurate, I have personally seen land purchased and being sold by Anshe Chung in May 2007.

Perhaps they are talking about "seeking" land, but she still buys land.

The article actually said "scaled back," not "stopped buying".

Despite the fact that loads of 512 m2 plots around me are for sale for just under L$ 6000 per plot, somebody has just put a 1024 m2 plot of land up for sale for nearly 20,000.
Guess they're not paying attention.

Someone is willing to buy it for that price. Why else would the market bear such prices?

Parcels for sale by Anshe Chung were all over the mainland last year. Her signs were highly visible. You just tend to see the odd isolated sim full of ACS parcels now; not the evenly distributed spread I remember.

It's wishful thinking. You can certainly get a premium for your land, but you have a much higher chance of getting it, if there is not a lot land for sale in a given sim.

The base price for Mainland is L$9.3 per meter today. If we do see a drop over the next few days, I don't think it will be too dramatic. The amount of tier you're going to be paying over the long run will be a bigger factor moneywise then saving a buck or two if the market goes from L$9.3 to L$9.0 or such.

I wonder if all these new continents created by LL are a response to First Land going away? Maybe LL is swamping the grid on purpose so that prices will fall for all those newbies...once they see land prices falling, maybe they'll be more likely to buy premium memberships, thereby giving LL more money and a more stable user base?

Dunno *shrug* it's an idea.

If LL wanted to encourage premium memberships they'd do what (I think) Nina Stepford suggested and sell direct at low prices on a parcel basis.

Bringing back a first land scheme would help there, however as the scheme was abused before they'd have to work out how to avoid that. Maybe tie it to a billing address so that only one person per household could take advantage of the scheme.

The problem is not enough land, it is not enough 'Nice' land.

I look around a lot for land, and it is not easy to find smaller lots that are nice. And there is nothing that is going to happen to change that anytime soon that I can see.

Even if LL gives it away, nice land will still be hard to find.

Agreed. Most of the Mainland continents somehow seem to have changed into...NEW JERSEY!

Hey, I resent that!

New Jersey has some nice places!

More seriously, it is the land-extortionists who are doing the most damage. Focus on them.

i don't think it was planned, here's why: LL selling plots in Corsica and other mainlands plots would want full price for their land. More money is more money. Why would they implement a plan to devalue the land, and not make as much money. with casinos now closed, i am seeing a couple of parcels up for sale, and at high prices, so far.

I think it was bad timing, and poor planning on the part of LL. good for a buyer, bad for a seller.

I love articles that talk about something "raising fears" of something else happening. It's propaganda and self-fulfilling prophesy.

"According to this article other people are afraid of this happening. Now I am, too! Yay! I belong to something!! I mean, what about the children!??!!" - the average reader

Welcome to the world of yellow journalism. If the article quotes a real person who is willling to put his name on what he says, that is worth considering. If an article quotes someone without naming them whose real life could be put at real, substantial risk, that well MAY be worth considering. If someone is not put at substantial personal risk and won't put his name on it anyway, I would suggest you forget it. Except to remember to go to other news sources instead.

Exactly, speculation and conjecture that could well lead to people panicking but I think many people here are wise enough to have a wait and see mentality rather than believing everything we read in the newspaper.

46 sims on the auction page at one time, folks. Some auctions are 8 hours away from closing and have not been bid up at all. I advise you hold off on buying land today if you can folks unless you want to buy in a specific established sim. There be some deals coming to market.

From my experience, the one thing that does get prices moving down is a dump like this.

Newspaper readership is going down, nationwide.