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Why Has The Price Of Land Sales Doubled?


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I used to own a couple of parcels on the mainland and I remember that I purchased them for about 6000ish last year.  A few months later I sold those parcels.  Now I noticed that one of them is up for sale again, but they want double what I sold it for.  I sold that parcel for about 6000 as well too.  Why is it that the price has doubled?  I can't even afford to purchase it at that price.

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There certainly was a step-function jump in Mainland prices when the new Premium bonus and tier rates were announced -- especially for 1024 and 512 parcels. Prices are settling back towards normal, helped in part by more aggressive sale of abandoned land, and now by pressure from reduced Estate fees. Mainland prices are still uneven -- perhaps some flippers are in denial, but the trajectory is clear. The Lab is very eager that land be more readily available and they're taking steps to make that happen. I'd expect further price reduction when the resident-to-resident auctions kick in.

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Just because the price of your lots are now LISTED at twice what you sold them for, doesn't mean they will sell at that price. OR that prices overall have gone up. I, personally, am not seeing that. Like always they are all over the board.  My little corner of the world where my shop is (I am on a hilltop) is a good example.  Land here ranges from 0.9 to 12.2.  Most lots you see are in the 0.9 price (likely the same seller but I didn't check this) with the ONE 12.2 lot being for sale since at LEAST March (so five months) as it was for sale when I moved here. 

With abandon land sales and plenty of less than a linden a meter land I can't see any problem. Land may have actually gone DOWN in overall price but you would need some good statistics to know if that is true. 

 

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2 hours ago, Mitchell Indigo said:

I used to own a couple of parcels on the mainland and I remember that I purchased them for about 6000ish last year.  A few months later I sold those parcels.  Now I noticed that one of them is up for sale again, but they want double what I sold it for.  I sold that parcel for about 6000 as well too.  Why is it that the price has doubled?  I can't even afford to purchase it at that price.

You can't infer from one anecdotal situation what the whole market is doing.

The glut of 1024s from new premium allowances should have driven DOWN the price of land, not increased it given that the Lindens are giving away more abandoned land at a fixed $1/m as a result.

But maybe it has passed the equilibrium point. The thing is, we don't know that until we get Tyche Shepherd's report and see just how much land has sold, i.e. left Linden hands and gone into resident hands, and what the average sale price is.

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8 minutes ago, Mitchell Indigo said:

Would you say then that this would not be a good time to buy land? 

I am sure there will be LOTS of opinions on this. "I" would say that there have always been opportunities in land -- whether lots were selling (selling mind you, not listed) for 286 to 22,000 linden for a 512 (those are my personal buy and sell figures not made up out of the ether ).  

It all depends WHY you are buying the land. And in part I guess, if it is a small piece or a full sim.  I am not sure I would buy a full sim right now just because we know that there will be lots of changes coming along. I am not much of a gambler (I play the nickle slot machines, not the dollar ones :D).  

If you have a REASON to buy land, then that would certainly figure into plans. If it is to make a profit? Well then as always buy good lots at low prices and resell a bit higher.  With so much land available now there are lots of possibilities but there are also risks. So if speculation is the game then just be sure you are not risking more than you are comfortable with. 

ALSO, remember that it is SUMMER IN SL.  Sales of most everything are way down for most folks including the major players. Folks are outside enjoying the warm days (for us US folks anyway) and so I wouldn't expect a lot of action until mid September, maybe a little before.  I thought about buying one of those .9 lots near me for prims, but I really don't NEED more prims so I will just keep what I have until there is a reason to buy. 

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3 hours ago, Mitchell Indigo said:

Would you say then that this would not be a good time to buy land? 

I would say that for me the best time to buy land is immediately before I want to do something fun with it.

For folks who get a lot of fun from buying low and selling high, I think this is a challenging time to find bargains. There's still plenty of nondescript stuff for sale above L$1/m² that six months ago wouldn't have gotten an opening L$0.5/m² bid at auction; I wouldn't bet on those parcels retaining their current higher valuation.

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17 hours ago, Mitchell Indigo said:

I used to own a couple of parcels on the mainland and I remember that I purchased them for about 6000ish last year.  A few months later I sold those parcels.  Now I noticed that one of them is up for sale again, but they want double what I sold it for.  I sold that parcel for about 6000 as well too.  Why is it that the price has doubled?  I can't even afford to purchase it at that price.

Land Barron business model 101

  1. Buy some land.
  2. Factor in the cost of holding that land for a period of time.
  3. Put for sale at a higher price than you paid for it including the costs from step 2
  4. If the land doesn't sell in time, goto 2 and compound costs.

Somehow you can make money doing this .. even though most land seem to carry a huge number of parcels for extended periods.

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20 hours ago, Prokofy Neva said:

You can't infer from one anecdotal situation what the whole market is doing.

The glut of 1024s from new premium allowances should have driven DOWN the price of land, not increased it given that the Lindens are giving away more abandoned land at a fixed $1/m as a result.

But maybe it has passed the equilibrium point. The thing is, we don't know that until we get Tyche Shepherd's report and see just how much land has sold, i.e. left Linden hands and gone into resident hands, and what the average sale price is.

For a capitalist you seem to have a rather foggy understanding of how capitalism works.

Increasing the amount of free tier included in the base premium allowance increased demand, and there's no evidence that the Lab is actively cutting and selling the small lots that Premium users with free tier burning a hole in their pockets would want. Someone would need to buy larger areas and cut them, and they'd mark the land up to cover their expenses and make a profit.

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19 hours ago, Theresa Tennyson said:

For a capitalist you seem to have a rather foggy understanding of how capitalism works.

Increasing the amount of free tier included in the base premium allowance increased demand, and there's no evidence that the Lab is actively cutting and selling the small lots that Premium users with free tier burning a hole in their pockets would want. Someone would need to buy larger areas and cut them, and they'd mark the land up to cover their expenses and make a profit.

No, dear. I get how a simple concept of supply and demand work.

What you don't get -- because you don't apparently log in, talk to a wide variety of customers, or have a business where you offer rentals for tier donations, is that *people do not use this tier, don't understand it, or use half of it only*. I find this is common. They have a 512 Linden House and don't get that they have another 512 to use now.

To be sure, there are those who get it -- hey, look at all those people in the Linden Houses! Oh, and that's the point. People get the premiums, they get that they can use the "land credit" for a Linden House -- and they get it, the end. They don't venture out to buy Mainland because too many people have scared them about doing that. Obviously LL would rather drive them into Linden Assisted Living where they--and the parcels--are more manageable than on the "Madlands" as Klyta calls it.

There are now MORE people buying Lindens Houses, which means MORE Mainland going UNSOLD to those who might have bought parcels on the Mainland, not Linden House lots. That's obvious point number one. That drives down prices.

But much more to the point:

The idea that there is "no evidence that the Lab is actively cutting and selling the SMALL lots" is preposterous. That's exactly what IS happening. I see it all around. I used my own additional premium tier in just that way but so did quite a few others. Not some huge drove of people but certainly a visible number that is making prices go down. I know, because I fly around, see lots of parcels, and buy them rarely, but sometimes if I need prim land and they go real cheap. Which is the case now.

The reason I say the glut of 1024s from new premium allowances should drive DOWN THE PRICE is because -- wait for it -- there is now more cheap land on the market! Hello!

People are buying more land that they get from the Lindens as abandoned land and either flipping it, or getting tired of it and selling it. Or some people are moving, now that they have 1024 tier to play with, and making quick sales or even abandoning land all over again. But they have to lower their prices from before, when there were less people doing that, less land for sale, and more abandoned land! More land = lower price.

Again, read what I wrote, which is a fact observable in world and documented by people on the forums: " Lindens are giving away more abandoned land at a fixed $1/m as a result."

They are giving it away at one dollar a meter.

Not five or seven or ten.

One.

That means cheaper land enters the market when people's purchase costs were low, and they can then resell it for less. People seeing the opportunity now of getting a) free tier from the Lindens they didn't have before it was raised b) one-dollar-meter land from Lindens who were more chary about giving it up before = more flips, sales, and particularly quick sales. $1.7 is a profit obviously. $3 even more. You don't have to put it at $7 and wait months and pay tier.

To understand this, you need not just "be a capitalist" -- which in my case means that I do not oppose but in fact support the system of capitalism, even though I am not a rich person in RL or SL -- you just need to have common sense and *watch what really happens inworld*.

Edited by Prokofy Neva
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On 7/21/2018 at 4:34 AM, Theresa Tennyson said:

there's no evidence that the Lab is actively cutting and selling the small lots that Premium users with free tier burning a hole in their pockets would want.

Per posts in the forums, what the Lab is doing is cutting pieces out of large abandoned plots if a Premium members specifically asks for it and then selling them the plot for L$ per sqm.  You do have to give them exact coordinates and I doubt they would cut from the middle rather than the edge, but if you meet those guidelines, then you can get a piece of a larger abandoned plot.

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On 7/22/2018 at 1:50 AM, Prokofy Neva said:

No, dear. I get how a simple concept of supply and demand work.

What you don't get -- because you don't apparently log in, talk to a wide variety of customers, or have a business where you offer rentals for tier donations, is that *people do not use this tier, don't understand it, or use half of it only*. I find this is common. They have a 512 Linden House and don't get that they have another 512 to use now.

To be sure, there are those who get it -- hey, look at all those people in the Linden Houses! Oh, and that's the point. People get the premiums, they get that they can use the "land credit" for a Linden House -- and they get it, the end. They don't venture out to buy Mainland because too many people have scared them about doing that. Obviously LL would rather drive them into Linden Assisted Living where they--and the parcels--are more manageable than on the "Madlands" as Klyta calls it.

There are now MORE people buying Lindens Houses, which means MORE Mainland going UNSOLD to those who might have bought parcels on the Mainland, not Linden House lots. That's obvious point number one. That drives down prices.

But much more to the point:

The idea that there is "no evidence that the Lab is actively cutting and selling the SMALL lots" is preposterous. That's exactly what IS happening. I see it all around. I used my own additional premium tier in just that way but so did quite a few others. Not some huge drove of people but certainly a visible number that is making prices go down. I know, because I fly around, see lots of parcels, and buy them rarely, but sometimes if I need prim land and they go real cheap. Which is the case now.

The reason I say the glut of 1024s from new premium allowances should drive DOWN THE PRICE is because -- wait for it -- there is now more cheap land on the market! Hello!

People are buying more land that they get from the Lindens as abandoned land and either flipping it, or getting tired of it and selling it. Or some people are moving, now that they have 1024 tier to play with, and making quick sales or even abandoning land all over again. But they have to lower their prices from before, when there were less people doing that, less land for sale, and more abandoned land! More land = lower price.

Again, read what I wrote, which is a fact observable in world and documented by people on the forums: " Lindens are giving away more abandoned land at a fixed $1/m as a result."

They are giving it away at one dollar a meter.

Not five or seven or ten.

One.

That means cheaper land enters the market when people's purchase costs were low, and they can then resell it for less. People seeing the opportunity now of getting a) free tier from the Lindens they didn't have before it was raised b) one-dollar-meter land from Lindens who were more chary about giving it up before = more flips, sales, and particularly quick sales. $1.7 is a profit obviously. $3 even more. You don't have to put it at $7 and wait months and pay tier.

To understand this, you need not just "be a capitalist" -- which in my case means that I do not oppose but in fact support the system of capitalism, even though I am not a rich person in RL or SL -- you just need to have common sense and *watch what really happens inworld*.

Agreed, if you want to take advantage of your increased tier you don't have to buy from a flipper. You simply submit a ticket and LL will sell you a 1024 at $1 L per sq m. The flipper down the road will sooner or later realize he can't sell HIS 1024 for $10  L per sq m, and will be forced to drop his price.

Forced by his own desire to make a profit, not forced by some government agency telling him how much he can sell his land for, and how much profit he can make.

As long as LL does direct sales for $1 L per sq m, the prices for all land for sale will be lower.

Its a shame LL doesn't have a full time person doing nothing but subdividing mainland into parcels for sale at $1 L per sq m, whether a ticket was submitted or not.

Edited by Phorumities
fixed stuff, added stuff
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Not sure when to expect Tyche's Mainland Census* but in the meantime I'm pretty sure there's both more land owned than there was before the tier change, and more land for sale. That is, I expect the inventory of Abandoned land has (quite substantially) shrunk.

So there's a bunch of land for sale that was abandoned before. That stuff will be priced considerably below the average price of the fewer, more select parcels that were on the market before the tier change.

There might even be so much of that low-value land now for sale that the overall average could be below where it was before -- even though the price of any individual parcel has increased

At least that's what I'm seeing.

____________________
The last seems to have been in January, and it appears to suggest they're annual, so we may have a while to wait.

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4 hours ago, Phorumities said:

Agreed, if you want to take advantage of your increased tier you don't have to buy from a flipper. You simply submit a ticket and LL will sell you a 1024 at $1 L per sq m. The flipper down the road will sooner or later realize he can't sell HIS 1024 for $10  L per sq m, and will be forced to drop his price.

Forced by his own desire to make a profit, not forced by some government agency telling him how much he can sell his land for, and how much profit he can make.

As long as LL does direct sales for $1 L per sq m, the prices for all land for sale will be lower.

Its a shame LL doesn't have a full time person doing nothing but subdividing mainland into parcels for sale at $1 L per sq m, whether a ticket was submitted or not.

Exactly. And the reason for that is a government intervention.

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no its not government intervention. Its the market working the way it should. LL has probably hundreds of sims worth of empty space. LL is itself a business entity. LL is selling land at $1 per sq m because it is more profitable for them to do so and collect tier than have it sit vacant and a drain on its income.

It has nothing to do with government.

Nice try though.

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6 hours ago, Phorumities said:

Agreed, if you want to take advantage of your increased tier you don't have to buy from a flipper. You simply submit a ticket and LL will sell you a 1024 at $1 L per sq m. The flipper down the road will sooner or later realize he can't sell HIS 1024 for $10  L per sq m, and will be forced to drop his price.

Forced by his own desire to make a profit, not forced by some government agency telling him how much he can sell his land for, and how much profit he can make.

As long as LL does direct sales for $1 L per sq m, the prices for all land for sale will be lower.

Its a shame LL doesn't have a full time person doing nothing but subdividing mainland into parcels for sale at $1 L per sq m, whether a ticket was submitted or not.

The smarter land flippers will still make a profit, however, as they will scout out cheap land to flip, their costs will be lower, they may have to sell for a lower price, but they will still make the same profit.

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26 minutes ago, Phorumities said:

no its not government intervention. Its the market working the way it should. LL has probably hundreds of sims worth of empty space. LL is itself a business entity. LL is selling land at $1 per sq m because it is more profitable for them to do so and collect tier than have it sit vacant and a drain on its income.

It has nothing to do with government.

Nice try though.

It is a government, however, and one like China or Russia -- authoritarian, arbitrary, and not transparent.

Normally governments do not sell for a low price or give away land in such large quantities. Except in a place like Russia, and in a place like Chechnya, where they give to their friends, insiders, people who do favours, etc. Unfortunately, the Linden dispersal of abandoned land still has that feature of discretionary power to it. They decide whether or not to sell it or put it on the auction. In the latter action, they can be spiting you, forcing you to pay high sums to keep the view, and possibly rewarding their friends, land barons with high tier. Among the reasons we cannot tell what is going on and the extent of this discretionary power is the lack of transparency on the auction. We do not know who bids or who wins and buys. We used to have that information.

The government "deciding to sell everything for one dollar" is not a normal practice even for a communist government. It's an artifice of a virtual world run by a company. Even so, it bears more resemblance to an authoritarian state with a socialist or communist believe system in spiking any attempts at capitalism (except for its own state capitalism), more than anything else.

There's always someone to come forward and justify the authoritarianism and socialism of Linden Lab, even in the name of capitalism, as they are a company in the free market of America. But it's more than fine to call this out, because it's not a model for the whole Metaverse, not a viable plan for the future, any more than the Soviet Union was.

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1 minute ago, Prokofy Neva said:

The smarter land flippers will still make a profit, however, as they will scout out cheap land to flip, their costs will be lower, they may have to sell for a lower price, but they will still make the same profit.

of course they will but my cost as an end buyer will be lower so it seems like its a win for everyone.

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1 hour ago, Theresa Tennyson said:

Exactly. And the reason for that is a government intervention.

Socialists love government intervention when it makes land cheaper or devalues it all together (the system of abandonment, which, of course, could be ended at any time under "code as law" and changed to a system of sale for $1 or sale for any price. 

Socialists like it less when their business suffers because the price of land and the value of the currency goes down, too, if it leads to their own business suffering or the cost of currency going up or taxes going up (which is EXACTLY what just happened in SL with the price of land falling!) to compensate. 

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6 minutes ago, Prokofy Neva said:

Socialists love government intervention when it makes land cheaper or devalues it all together (the system of abandonment, which, of course, could be ended at any time under "code as law" and changed to a system of sale for $1 or sale for any price. 

Socialists like it less when their business suffers because the price of land and the value of the currency goes down, too, if it leads to their own business suffering or the cost of currency going up or taxes going up (which is EXACTLY what just happened in SL with the price of land falling!) to compensate. 

Socialists have businesses? You're starting to sound like Father Charles Coughlin, who used to rail against "Communist bankers."

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42 minutes ago, Phorumities said:

no its not government intervention. Its the market working the way it should. LL has probably hundreds of sims worth of empty space. LL is itself a business entity. LL is selling land at $1 per sq m because it is more profitable for them to do so and collect tier than have it sit vacant and a drain on its income.

It has nothing to do with government.

Nice try though.

Definition of government

1: the act or process of governing;  specifically : authoritative direction or control

Definition of govern

1a : to exercise continuous sovereign authority over;  especially : to control and direct the making and administration of policy in  
  • The country was governed by a king.
b : to rule without sovereign power and usually without having the authority to determine basic policy 
 
 

Either Linden Lab functions like the government in a market or it's just one participant in a market, but is the only participant capable of creating and destroying the goods being traded, which would make Second Life a spectacularly non-free market. 

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2 hours ago, Theresa Tennyson said:

Socialists have businesses? You're starting to sound like Father Charles Coughlin, who used to rail against "Communist bankers."

of course some socialists have businesses. do you think every socialist in america is a disgruntled worker?

 

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2 hours ago, Theresa Tennyson said:

Definition of government

1: the act or process of governing;  specifically : authoritative direction or control

Definition of govern

1a : to exercise continuous sovereign authority over;  especially : to control and direct the making and administration of policy in  
  • The country was governed by a king.
b : to rule without sovereign power and usually without having the authority to determine basic policy 
 
 

Either Linden Lab functions like the government in a market or it's just one participant in a market, but is the only participant capable of creating and destroying the goods being traded, which would make Second Life a spectacularly non-free market. 

LL is not a government. It is a private enterprise that lets you use their service if you agree to their TOS. Second Life was created and is maintained solely to provide a profit for LL.

 

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1 hour ago, Phorumities said:

LL is not a government. It is a private enterprise that lets you use their service if you agree to their TOS. Second Life was created and is maintained solely to provide a profit for LL.

 

Linden Lab has authoritative direction and control within Second Life; it and it alone has power to control the making and administration of policy. If the "land business" of Second Life is a market, then Linden Lab is the government.

Edited by Theresa Tennyson
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