Florida land boom of the 1920s facts for kids

The Florida land boom of the 1920s was a time when land prices in Florida went up really fast, like a giant bubble! This happened between 1924 and 1926. Lots of people from all over the country wanted to buy land in Florida. They hoped to sell it for much more money later.

This boom created many new towns and cities, like Miami Beach and Coral Gables. It also left behind some failed projects, like Aladdin City. The boom changed Florida's future for many years. It even created new cities out of the Everglades wetlands.

This period was a lot like the real estate boom in the 2000s. People from outside Florida bought land, it was easy to get loans, and land prices quickly became very high. But then the bubble burst. This caused many investors to lose their money and hurt Florida's economy for a long time.

Why the Florida Land Boom Happened

Many things helped the Florida land boom start.

New Ways to Travel to Florida

First, new railway lines were built. The Florida East Coast Railway reached West Palm Beach in 1894 and Miami in 1896. It even reached Key West by 1912. These new train lines made it much easier for people to travel to Florida.

More Land and Good Weather

Also, parts of the Everglades were being drained. This created new dry land that people could buy and build on. After World War I, rich people could not visit places like the French Riviera in Europe as easily. So, they looked for warm, sunny places in the U.S. Florida, with its Mediterranean and Tropical weather, was perfect.

Miami's Popularity Grows

The 1920s were a time of great wealth in the U.S. People did not know much about how often big storms hit Florida. Also, builders used poor quality standards for new homes. All these things set the stage for Florida's first real estate bubble.

Miami was seen as a tropical paradise. People from all over the United States wanted to buy land there. Developers used clever ways to get attention. For example, a famous developer named Carl G. Fisher bought a huge lighted sign in New York's Times Square. It said, "It's June In Miami!"

Fisher's advertising and investments, along with others, made land prices go up very quickly. This is how the boom began.

Problems with Shipping and Supplies

As the boom grew, brokers and dealers bought and sold goods like crazy. They ordered too many supplies, and trains became stuck. This blocked the movement of goods all over Florida.

The boom affected more than just Miami. Tampa also grew, but its economy was more varied. It had factories and tourism. Miami's economy relied mostly on tourism. Jacksonville, Florida's largest city, was not as affected. Its leaders focused on industry and trade instead of just tourism after World War I.

The End of the Boom

By January 1925, people started reading bad news about Florida investments. Forbes magazine warned that Florida land prices were too high. They said prices were based only on finding another buyer, not on the land's real value. The Internal Revenue Service (IRS) also started looking into the boom. They thought it might be a huge scam.

People who bought land just to sell it quickly for a huge profit found it hard to find new buyers. To make things worse, in October 1925, the main railroad companies in Florida stopped most shipments. This was because there were too many building materials stuck on the tracks. Only food, fuel, and other important items could move.

The Prinz Valdemar Incident

Then, on January 10, 1926, a large ship called the Prinz Valdemar sank in the mouth of Miami harbor. It was a 241-foot steel ship that was supposed to become a floating hotel. When it sank, it blocked access to the harbor.

Because the railroads were already blocking shipments, it became impossible to bring building supplies into Miami. The city's image as a tropical paradise began to fall apart. This incident actually saved some people from losing a lot of money. It showed everyone that the Miami boom was not as strong as it seemed. New buyers stopped coming, and land prices stopped rising. The days of land being bought and sold many times in one day were over.

Hurricanes Finish the Boom

Even though the railroads started shipping goods again in May 1926, the boom was already ending. Two big hurricanes sealed its fate. The 1926 Miami hurricane destroyed much of the remaining excitement for Florida land. People were not ready for such a strong storm. The smaller 1928 Okeechobee hurricane made sure the boom was completely gone.

Florida's economy started to decline even before the Great Depression began. This meant Florida had fewer resources and more debt than other parts of the country. Much of this debt came from the land boom years. During the boom, local governments borrowed a lot of money to pay for new projects. After the boom, they did not have enough money to pay back these loans. This led to many governments not being able to pay their debts.

Money in Florida banks had grown steadily from 1922 to 1925. But then it started to drop. By 1926, smaller banks began to fail. This was because people took out their money, and many loans were not paid back. The easy money and credit that fueled the boom simply disappeared.

See also

In Spanish: Burbuja inmobiliaria de Florida en los años 1920 para niños