Looking to buy a house but finding yourself priced out of the market or reduced to a shoebox in the wrong part of town? Calm down because new communication technologies have brought forth an elegant solution: you can instead live in a beautiful and spacious online residence. Why would anyone want to settle for a pokey little flat in the real world, after all, when they could live in a place where land is plentiful, property prices are cheap and homes can be built to any design specification within 24 hours?
It’s easy to imagine the pitch of a virtual estate agent in Second Life. For those who are not yet acquainted with it, Second Life, known to its devotees as SL, is a three-dimensional online world, sometimes called a “virtual universe”, built and owned entirely by its residents. New users are invited to create an avatar, or visual persona, and then guide that avatar through three-dimensional landscapes in which they can chat – via a keyboard and speech-bubbles – to other avatars and teleport themselves anywhere they want to go. The most visually impressive of the new generation of social-networking sites, Second Life has grown with astonishing vigour and is now home to more than 3m people.
Not all are avid users, of course. Even Second Life founder and chief executive Philip Rosedale has admitted that estimated “churn” – the number of people who join up but don’t participate it in any regular way – stands at about 90 per cent. But for those who do decide to stay, it is important to think about putting down roots. In Second Life, unlike the real world, there is unlimited space and a pioneering spirit – and housing construction is booming as a result.
Linden Lab, the company that Rosedale heads, governs Second Life in the sense that it “rents” land to new inhabitants and enforces a few simple ground rules. Other than that, it stands back and lets Second Lifers get on with it. The economy has its own currency, Linden dollars, which can be bought and sold for real currency at a variety of different currency exchanges. They currently trade at about 135 Linden dollars to the pound. Thanks to an innovation introduced in 2003, Second Lifers retain the rights to their digital creations and can do with them more or less what they please. Using the software tools provided, inhabitants can build themselves houses, Lego-style. Free lessons are offered both by volunteers and by Linden Lab staff. But since building a house – even in the virtual world – takes skill and a little technological savvy, it is much easier to buy from professional property developers or virtual estate agents.
But what to look for when purchasing a home on Second Life? To find out, I went in search of some residents with hands-on property market experience. My first journey was to a mainland region called Ahndang and into the front garden of a first-time buyer called Honeydew Hilite. Honeydew’s real persona is Alma Francis, a 33-year-old from the Virgin Islands in the Caribbean. She is only a recent arrival here – she joined in October 2006 – but she has certainly made herself at home. She bought her Second Life residence, she says, from a virtual estate agent in the area. He was developing a strip of houses at the time and since she couldn’t make up her mind, she bought all five. She paid 150,000 Linden dollars, which worked out at about $700 at the time; she also pays a total of $75 a month in maintenance fees.
As we talked, she took me into a vast dining room and then to the lounge with a huge home cinema screen on the wall. To the side was a swish cocktail bar for parties and a piano with sheet music. There is a premium for living on a beachfront, she admits, but she was happy to pay it. “I’m an island girl at heart,” she told me, “even in SL.”
From Ahndang I teleported straight to the home of Elizabeth Trigg, a 42-year-old from Nova Scotia in Canada. In the real world, Trigg works as a writer for children. In her Second Life persona, however, she is Elizabeth Levi, owner of a shoe shop and the inhabitant of a stunning, spacious loft apartment on a private island. She didn’t pay for it; it was a gift from a friend with whom she collaborates in Second Life. Levi was keen to tell me that many of the things in her house – the sofa and the fireplace, for example – she had built herself. Other things she had bought to order. In one corner, a virtual washing machine was merrily spinning away and she had a beautiful if chintzy bathroom that wouldn’t have looked out of place in one of Saddam Hussein’s former palaces. Her home had room enough for an office and some of the walls were embellished with murals to add warmth. After a quick look around, she invited me to join her on the roof terrace, where she had planted trees and installed some chairs. As we sat together admiring the view, she told me that she’s currently looking for a plot and a partner with a view to building a hotel in Second Life.
If this is beginning to sound like a virtual version of the board game Monopoly, there is also real money to be spent and made here. Aside from housing, there is buoyant demand for commercial property as blue-chip companies, impressed by the youthful demographics of users and the creativity of residents, swarm into Second Life in search of an office. Unsurprisingly, a swathe of virtual real estate moguls have appeared, buying land, using software tools to fix it up, adding infrastructure and natural features – roads, rivers, mountains – and then renting them out to users at a premium.
The most famous property tycoon in Second Life is Ailin Graef, a Chinese-born former teacher who lives in Germany. Online her name is Anshe Chung and she has built and maintains a private continent called Dreamland. There is also a development company called Deep Think, co-founded by a property magnate called Adam Frisby and most widely known for its involvement in a Second Life region known as Azure Islands. Based in Perth, Australia, Frisby has built his empire in only two years, with the help of a business partner and seven support contractors.
When I asked Frisby for some advice on how to buy a house in Second Life, he told me to steer clear of fly-by-night developers who set up estates and then pay no attention to their upkeep. This was echoed in other conversations I had. The advantage of buying houses in bulk, Honeydew Hilite told me as we walked around her house, is that it reduces the risk that you wake up the following morning, for example, to find a skyscraper obscuring your view of the virtual ocean.
Justin Bovington, chief executive of a self-styled “virtual world development agency” called Rivers Run Red, which builds infrastructure and “virtual offices” for companies such as Reebok and Vodafone, agrees. “The common mistake people make when buying residential property in SL”, he says, “is that they don’t think about where they want to be tomorrow and how their neighbourhood might grow. Just as in any frontier colony, neighbourhoods change overnight. It’s better to spend a little more money and buy into an established community.”
Property moguls sign covenants that – at least in theory – are supposed to prevent unsuitable development. They work by operating zoning controls for everything within their region, so that they can guarantee a certain kind of experience for their residents.
The intriguing thing about Second Life – and the reason why some economists are becoming interested in using it as an experimental model – is the uncanny way in which trends in the virtual world tend to mirror those in the real one. Just as in real life, buying your first virtual home is an important rite of passage. People take on a sense of ownership, Frisby pointed out, and can become very house-proud. It is very common for new buyers to give their neighbours and passers-by tours of their home.
The shifting demographics of Second Life in the last few years (there are now almost as many European residents as Americans) have resulted in changed in its housing stock. There are now fewer “home on the range ranches and more apartments with a European feel”, Bovington says. The zoned, privatised communities established by property speculators such as Chung and Frisby also resemble the gated neighbourhoods that pepper many real cities and suburbs.
There are still differences between Second Life and reality, of course. Because users can teleport themselves almost anywhere in an instant, the real-world estate agent mantra – location, location, location – doesn’t apply. The experience a home offers becomes much more important, Bovington says. The fact that land in Second Life is technically infinite should also make it immune to sudden gusts of inflation or deflation from house price spikes and crashes.
But that’s not always the case. Linden Lab has to commission extra servers to expand the territory on Second Life, so there have been cases in which the virtual supply chain is hindered by real-world capacity. In December 2006, for example, property values rose 24 per cent, partly because of a temporary scarcity of available land. Property disputes are already common too and increasingly spill over into real courtrooms. Last year, for example, a man from Pennsylvania sued Linden Lab after the company allegedly seized some Second Life land he owned. In November last year, there was an uproar when someone invented a program allowing users to duplicate elements of other people’s creations, which would have stripped virtual property – however elaborate or expensive – of any tradable value.
After my time on Second Life, I sense that the virtual building boom can only gain momentum. Developers see an easy way to make money and residents are clearly quite attached to their virtual palaces. Honeydew Hilite so purred with pride about her abode that it was difficult for me to get out of the door. When I noticed that her living room offered a stunning view of the Second Life ocean outside and told her it was beautiful, she beamed. “You should see it at sunset,” she said.
