Reflecting the fall of property values in the real world, it now seems that the price of real estate in Virtual Worlds is also collapsing. 
Second Life, which is one of the most populated and advanced virtual worlds, may be seeing prices fall more than most.

PathFinder at Flickr – http://www.flickr.com/photos/pathfinderlinden/227316648/

Comments from a Second Life blog asked if there, “seems to be there is trend in the downfall of land purchases. Anyone have any idea why the market is declining.”

Why is virtual real estate falling?

It’s probably a combination of factors:

1. Gamers are now spending less time in games (as they have other financial obligations) and are less likely to buy land

2. It may also be related to a recent price hike by Linden Labs, the developers of SL

Sessie replied on a Flickr blog that, “If you lost your job in RL (real life) hard to pay for SL.”

This was echoed by another SL enthusiast (Kitty) who added that, “You can only base real value on something that has scarcity, and in the case of virtual land, there really is no limit to it, you can always make more.”

3. XavionSaltair summarized the problem facing virtual retailers saying, “Second Life is one of the few Internet businesses that suffers from the hurtful economy downfall. Losing your RL job does make it difficult to pay for anything that doesn’t replace the missing income from that job loss.”

It seems that competitors have cut the price on their land sales down to 1L$ only to raise them back up again.

XavionSaltair advice is: Take care of your 1st life first, then worry about the 2nd.

Unless you have a virtual business that can offer you a rescue from the poverty-like conditions that some of the world is facing, then it’s probably best to give a wave goodbye to building your dreamland Utopia…at least for now.

Note: 1L$ is 1 Linden Dollar, the virtual currency used in Second Life.

Links: http://www.flickr.com/groups/secondlife/discuss/72157619799197927/

Have you seen real estate prices drop on Second Life or other Virtual Worlds?

Related posts:

1. Virtual Worlds to Make 10 Billion USD by 2013, 900 virtual worlds by 2012 KZero expect growth in virtual worlds come from multiple areas,...
2. CNN’s report on how Virtual cash meets the real world CNN’s report on how Virtual cash meets the real world...
3. The Future of Credit Cards – Earning virtual currency for spending in the real world The Future of Credit Cards – Earning virtual currency...
4. Second Life's virtual economy over $500M a year Patrick Hoge, writing in the San Francisco Business Times, reports...
5. How to create a virtual currency How to create a virtual currency...