This has been mentioned quite a few times on the forum, i have hit that number a few times and try and stay below it if possible, some people have reported hitting higher, i think the highest is somet...
I think it also comes down to the device you are using, for example when i visit a neighbour from my town on my iPhone5 i have no real issues but when i use my iPhone4 and visit the same neighbour the lag is a nightmare! I believe said neighbour is probably at around 5500+ items (not mentioning the persons name)
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