Premium Domain Values Increase By 59%, But Only 31% Actually Developed

Premium domain names continue to be an outstanding investment. that is nothing new to domain investors, and now the numbers confirm what many of us have known for several years.

Looking at DNJournal's List of Top 100 Reported Sales this year (2007) and last year (2006), the top 100 median sales price has increased from $124,000 in 2006 to $197,500 in 2007.

That's an upsurge of 59.27%, which is a pretty good representation of that year's bull market in premium domains.

Owners of LLL (three letter) domains have seen the values of their domains increase by at least that percentage by the course of 2007, and the same applies to many top generic domains whose sales either remained private or simply did not meet the $100,000 threshold to be included in that year's top 100 list.

Is there a drawback to that continuing boom?

Fears of the domain market overheating have shown to be been unfounded so far. The real concern may be that with domain values shooting up so rapidly, very few domain owners are devoting any of their resources to actually developing their domains.

After all, there is simply no point in developing a domain you just bought whether you can resell it a few months later at a significant profit. Broadly declining PPC (pay per click) revenues do not seem to affect that situation at all, at least for the instance being.

How severe is the situation?

Let's look at the numbers:

Of the 105 highest priced domains sold in 2007, only 33 domains (31%) have been developed or redirect to a developed site, 3 are affiliate sites, and 10 are either abandoned or seem to be under development. 4 domains don't resolve at all and a massive 55 domains (52.58%) display PPC ads.

While we can safely assume that many retail sales (from domainer to end users, or among end users) go unreported and therefore do not show up in domain sales charts, I'd love to see some examples of premium domains being developed into a profitable business not just by large companies but above all by domainers and up-start companies.

Such domains could serve as shining examples to truly reinforce the monetary value and marketing potential of generic domains to potential mainstream buyers, who are - for the most part - still sitting on the sidelines.

Original post by domainer