Attractions - How To Succeed 2

FLORIDA Early Property Boom In the 1920’s, Florida experienced its first taste of land and property speculation, which led to a land boom. The bubble finally burst in 1925. Leading up to the 1920’s, the state’s economic fortunes had been on a steady uptrend. This was particularly true of Miami which, by now, exuded an image tantamount to a tropical paradise. Accordingly, investors and speculators from across the United States were drawn by the spectre of easy money by way of Miami real estate. The market was further ignited by pragmatic developers who embarked on aggressive advertising campaigns using illuminated billboards. Unsurprisingly, property prices began to rise steadily accompanied by a development boom. Everything seemed to be rosy in the garden until, in January 1925, the influential Forbes magazine ran a series of articles in which they cautioned that property prices in Florida appeared to be based on appeasing pent-up demand rather than realistic land valuations. Warning bells finally began to ring in the minds of investors when not only New York bankers but also the IRS began delving deeply into what had surely become a Florida real estate boom. Consequently speculators, who had previously turned over properties at an astonishing rate found it was becoming increasingly more difficult to find new buyers. By now, it was obvious to all that this real estate bubble had finally begun to burst. Things finally came to a head when, in January 1926, the Prinz Valdemar, an old Danish warship, sank in the mouth of Miami harbour where all the vessels conducted their turning manoeuvres. She capsized and blocked the port of Miami for several weeks so helping to aid the demise of them real estate boom. Ironically, she had been on her way to becoming a floating hotel. At that time, the rail system was stretched almost to its limits under the requirement to transport not only food but also building materials to feed the insatiable real estate boom. As a result, they were forced to raise shipping rates. Therefore, when the sea route to Miami was blocked by the Prinz Valdemar, this was the final nail in the coffin of the city portraying itself as a tropical paradise. In fact, three months earlier, in a desperate attempt to relieve the logjam in the state’s rail system, the railroad companies agreed to place an embargo on all goods, apart from food, transported by rail. This further added to the already inflated cost of living brought about by the property boom. Accordingly, new purchases of property began to falter leading to a slow but inexorable decline in the market. The real estate bubble had finally burst. All that was left was a distant memory of Miami properties being turned round at auction as many as ten times in one day. In 1926, Miami was devastated by the Great Miami Hurricane which drove many development projects into bankruptcy. To add to the misery, the Lake Okeechobee storm surge in South Florida in 1928 and the Wall Street Crash in 1929 further exacerbated the downward economic trend. The property boom was officially over with the onset of the Great Depression in 1929. In retrospect, it only took a few years to turn an idyllic tropical paradise into a desolate region. It would not be until the onset of WW2 that Florida’s fortunes would recover, once again. Interestingly, this scenario holds many parallels with more recent real estate booms. Attractions – How To Succeed