Hi folks,
The Valuation Board has been aware of not-unfounded complaints about our valuations -- that they're not accurately depicting current sale prices of items. While our valuations are backed up by automated calculations of prior sales, it's been apparent that we've needed a hard look at those calculations to bring values back into the realm of reality.
The
tl;dr version: On March 1st, our new formulas will go into effect, which should hopefully bring values more in-line with recent sales. A few items will actually decrease a bit, but these are almost exclusively super-rare items that have few (or no) recent sales. New sales will have a much bigger effect on item values now, and sales older than four years ago are completely ignored.
The extended version:
Accurate valuation always been a problem with the rares, and one of the arguments for hand-altering values where appropriate. But that takes time, and consideration, and needs to be applied fairly and consistently, which is hard to do. And is ultimately not very defendable, because you're straying away from the math. While everybody loves to see values go up, we risk the issue of artificial price inflation if we do this too quickly. A $10,000 sale of a Ghost Tower may be the direction the market wants to head -- but it also could be an aberration. It's a tough call.
The old system "weighted" auction sales on the following scale:
This year and last year: 8
Two years ago: 5
Three years ago: 4
Four years ago: 3
Five years ago: 2
More than five years ago: 1
Ergo, a module sale from this week was weighted eight times as much as a sale from 2004. "Year" in this case was "calendar year", so a sale from Dec 2021 was "two years ago". Additionally, the system used two separate calculations to arrive at the final value. The first is year-weighted sales, as discussed. The second, which Kent Kelly called the "crunch", just lumps in all the sales without regard to year. The two figures are then averaged to get the final value. The intention there was to help prevent newer sales from dramatically spiking the value (especially on items with few sales). However, we realized that over time, the lodestone of old sales was artificially preventing newer sales from moving the needle much at all. Values from 2004 were still having some impact, and even maybe more of an impact than intended, since I think an argument could be made that super-rares changed hands more often in the early days, rather than today when they're mostly in secure vaults.
The new system:
This year: 10
Last year: 8
Two years ago: 6
Three years ago: 2
We've switched from "calendar year" to "actual time", so a sale from Dec 2021 is fourteen months ago, which on this scale is "last year". The auction timing actually goes down to the second (not because we need to be that accurate, but the system records the end time that accurately, so why not use it).
Auctions four years ago or more are now ignored. The exception is what dbartman has termed the "Rule of Four", which keeps the most recent four sales of an item, regardless of age, and weights those four sales each at 10. Therefore, for an item with the following sales:
$750 Feb 2020
$500 Mar 2017
$450 Mar 2015
$300 Dec 2008
$125 Jan 2004
... the first four sales would be used in the calculations (and all equally weighted), and the fifth sale would be ignored because it's too old. This prevents super-rare items, like the one described here, from having their value completely set by the most recent sale; those older sales do still factor in some.
We also eliminated the "crunch" calculation, where all sales were thrown together regardless of age. Therefore, there will be a further boost to the influence of recent sales.
We've given this the eyeball test, and it does appear that values should now be a heck of a lot more accurate to what we're seeing in the marketplace. As always, our caveat is that the Indexes are not intended to be a price guide, but to give general price guidance.
Special thanks to
dbartman for his excellent input and number crunching ability! And further shout-outs to
darkseraphim for giving us a workable valuations system that has taken us through nearly twenty years.
Regards,
Foul
