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Compiled by Roger Inglis
SLReports.net Introduction This is the Land Sales Report for the month of June. This report will give a clear view of the land sales market. For this we use several statistics from Linden Lab and we developed some own tools.
The land sales market is a very interesting market in Second Life, because of the many real estate firms in Second Life. For these firms the land sales market is of course very important. Important for real estate firms is the price they get for a square meter. Besides for the firms the situation of the land sales market is also important for people who want to rent. In this report we focus on the development of the land market. We will have a close watch on the trend (upward or downward) of the market. To judge the land sales market on one statistic is very imprecise and less reliable. Therefore, we use several tools to give our view on the land sales market. Land size development 
Graph 1 Here we see the development of the overall land size in square kilometers. The blue bar is the mainland and the purple bar is the aggregate size of all islands.
We notice a continual and linear growth. We also see that most of the Second Life grid is occupied by islands. In May for example the total Second Life area was more than 600 square kilometers. In June there are 8336 islands owned by residents.
Land sales development 
Graph 2 Here we see the development of the land for sale. We distinguish three different categories of land sales. First the blue line represents residents with parcels for sale (6358 in the mid of June). Then the purple line indicates parcels for sale (34616 in the mid of June). Last we have the yellow line with total square meters for sale (23,217,792 in the mid of June). On the left axis you don’t see the amount of residents/parcels/square meters. For this graph we indexed the three tools. We did this because only a comparison of the three is useful rather than just giving the absolute numbers. So with April as our base month we see the development of the three lines. We see that the amount of residents with parcels for sale grew harder than the other two. We can conclude that the average amount of parcels per person has decreased. Also the average amount of square meters per person has decreased. This could indicate that more people with small land holdings are selling. According to us this is a typical development. In the beginning of Second Life there were of course only a few big landowners and real estate firms. Later on smaller landowners (maybe you can call them private owners) became active after they saw the success of the land market. Another reason can be the population growth in general. Also we see that the average parcel is smaller (because the total parcels grow harder than the total square meters). We think this development is linked with the development of more people selling land.
Situation on the land sales market To give a judgment about the land sales market we will use three statistics. With these statistics we try to explain what the situation is on the land sales market.
Here in the first statistic we see the land sales per month. Don’t confuse this with the amount of square meters for sale (which we discussed previously). This graph is about square meters sold not listed for sale. What we can conclude is that after an increase in May the land sales in June declined. This is a negative development. This development is also quite surprising because the Second Life economy is growing quite hard.
Graph 4
Then we will have a look at the average price per square meter. This statistic is of course very important. Especially the price is important for real estate and land development firms. We see negative developments in the price per square meter. In April the price was 10.33L$ and in June the price declined to 9.07L$. This decrease is quite high.
Graph 5 Then we have the LST ratio which we developed ourselves. The LST ratio is the amount of square meters for sale in the middle of the month, divided by the total square meters sold in the month. LST ratio= amount square meters for sale/square meters sold in the month So the LST ratio shows us how fast a square meter is sold. A LST ratio of 1 means that (on average) it takes one month before a square meter is sold. A LST ratio of 0.5 then means that it takes a half month before the land is sold. You can see that a low LST ratio is much more desirable. We also see negative development in this area. The LST ratio is increasing, which means that it takes longer to sell a parcel of land. . For a strong economy it is of course better when land sales happen quickly. So what can we conclude from the three statistics? We see that the development of the last months for all of the three statistics is negative. We have seen decreased land sales, lower prices and longer selling times. Our main conclusion is that the land sales market is worsening. Overall we think the land sales market is still positive enough. The LST ratio for example is still quite low. One point of concern is the price per square meter.
General conclusions What could be the reason for this decline in the land market? The decline could be declared either by the demand side or the supply side. One reason could be the stagnation in population growth we have faced in the last few months. From graph 1 we saw that the land supply is increasing still in a straight line. So actually the land supply is growing harder than the population. Assuming that among new residents a lot of land buyers exist, we can conclude that the demand for land doesn’t grow hard enough to keep in line with the supply. And when supply is higher than demand prices will decline. Then let’s consider a clear demand side reason. We already concluded that the economy of Second Life is growing quite hard and this could not be the reason. Another reason could be a shift of interest. In the beginning the real estate market was one of the few industries in Second Life. But later on there appeared more industries (especially the last months). These new industries are competitors for the real estate industry because they attract money flows that otherwise could go to the real estate market. Businessmen have more diverse investment opportunities than months ago. Our main conclusion is that the land sales market is declining. But we think that there are still enough possibilities. Regarding the speed a parcel is sold (the LST ratio); we think the market for land sales isn’t that bad. Important is to keep an eye on the price. We think the price decline is the highest point of concern. The price declined quite fast from above 10.30 to 9.07. For the stability of the land market it is important that this price will stabilize. The following months we will learn more about the land market.
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