The Florida land-grab and crash of 1926-1927
This 2002 discussion of the Florida land boom and bust of the 1920’s comes from the Oxford Club:
George Merrick switched from selling fruit to selling Miami land in 1914, and Florida would never be the same again.
– In 1910, only 5,471 people lived in Miami. But that was before Merrick. By 1925, he had 3,000 real estate salesmen in Miami. Merrick’s fleet of 76 busses was constantly bringing down prospective buyers who all had the same mission: to get rich on Florida real estate.
– George Merrick is only a small part of the story. In all, by 1925, there were 25,000 real estate agents working in 2,000 offices in Miami. As the population grew to 75,000 - remember, it was 5,000 just 15 years earlier - an astonishing one in three Miami residents sold real estate there.
Why was everybody hustling to buy in Florida? Author John Kenneth Galbraith explained it well in his 1954 classic The Great Crash:
“This is a world inhabited not by people who have to be persuaded to believe but by people who want an excuse to believe. In the case of Florida, they wanted to believe that the whole peninsula would be populated by the holiday-makers and the sun-worshippers of a new and remarkably indolent era. So great would be the crush that beaches, bogs, swamps and common scrubland would all have value.”Stories of overnight fortunes were headlines across the country…
* “One man picked up ocean frontage for a quarter ($0.25) an acre and sold it for a million;
* Another reluctantly took 1,200 worthless acres on a debt and couldn’t sell it at $10 an acre until the boom delivered him a whopping $1.2 million.
* A returning soldier traded his overcoat for 10 worthless acres near the beach and soon found it worth more than $25,000.
* A poor woman who had bought a Miami lot back in 1896 for $25 sold it during the boom for $150,000.” (From the book Rainbow’s End by Maury Klein.)
We’ll have to see in there are any parallels between in 1920’s and today in the ebbs and flows of markets.