Posted on 08/20/2005 4:18:25 AM PDT by thinking4me
Land in 1920s Florida was so hot, people sold underwater lots
ORLANDO, Fla. -- Aug. 12, 2005 -- Gertrude Shelby asked her readers a question in a 1926 issue of Harper's magazine: "Did you ever keep chickens?"
Ms. Shelby, a journalist, was using a metaphor to explain the rapid inflation of property prices in Florida. "Put down a pan full of big scraps, and the hens come running. The first ones grab big pieces and depart rapidly. ... The others see the pieces in the beaks, and instead of realizing there's plenty more in the pan, they chase the hens who got the first pieces. That's resale psychology."
In less than a decade, that psychology transformed Florida from an overgrown bog to the epicenter of get-rich-quick schemes. Debarking from a train in Miami in 1925, an English tourist remarked on the city's "tropical bedlam," where sales agents pounced on visitors with noisy promises of "unsurpassed fortune."
"One had been prepared for real-estate madness," the Englishman wrote. "And here it was, in excelsis."
The Florida boom of the 1920s was far from America's first land rush, but it was certainly one of its most colorful, thanks to visionaries and hucksters like George Merrick, Carl Fisher and D.P. Davis. When Mr. Davis's first two island developments near Tampa went on the market in October 1924, people lined up for 40 hours before the sale began. One man chained himself to the door so he wouldn't lose his place. Not only did the entire 875 acres, much of it still underwater, sell out for $18 million, but an additional $8.2 million was returned to eager buyers whose money had arrived too late.
With World War I over, and Calvin Coolidge, the preacher of prosperity, in the White House, ordinary working Americans in 1924 were feeling optimistic and flush. Cars were beginning to become more affordable, and highways were reaching regions largely inaccessible until then. And Florida, like Southern California, had something people from the North and Midwest were willing to pay for: balmy winter weather.
A few foresighted developers already had started converting Florida's climate into cash. But first they had to clear the dense vegetation; drain, dredge, blast and fill; pour concrete; pump sand onto the waterfront; and import flamingos and date palms. They changed the name of Bull Island to Belle Island; Mosquito Inlet was renamed Ponce de Leon Inlet. George Merrick dreamed up a model city called Coral Gables, "wherein nothing would be unlovely."
Carl Fisher took one look at a mangrove stand and imagined Miami Beach. With the extension of the rail line to Miami, some pockets of Florida began to serve as winter playgrounds for the very wealthy.
World War I briefly interrupted the state's budding development, but soon after it ended, stories of the "American Riviera" and its skyrocketing property values began drifting north, assisted by a determined campaign of boosterism. "The only man that doesn't make money in Florida real estate is the man that doesn't own any," one slogan went. George Merrick hired William Jennings Bryan, former presidential candidate, to exhort the virtues of buying Coral Gables property twice a day to visitors. "Miami is the only city in the world," Mr. Bryan said, "where you can tell a lie at breakfast that will come true by evening."
Even Florida's government did its part to attract investors. In 1924, it amended its constitution to abolish income and inheritance taxes. Nor did Florida require motorists to have drivers' licenses. Its 45 mph speed limit was the highest in the nation. And the state's proximity to Cuba and the Bahamas guaranteed that Prohibition wouldn't kill the fun.
By 1925, the entire state had become one big commodity pit, with hundreds of thousands of visitors using a 10 percent "binder" to buy lots they intended to sell, at a profit, long before the other 90 percent was due. Some lots went through a dozen hands before the contract settled.
The first generation of Florida buyers, like early converts to many speculative frenzies, did very well. A piece of land in Palm Beach that sold for $84,000 in 1915 was assessed 10 years later at almost $5 million. But as the prices inflated, so did the promises. A subdivision called Manhattan Estates was promoted as "not more than three-fourths of a mile from the prosperous and fast-growing city of Nettie."
Nettie did not yet exist.
People bought lots sight unseen - a blueprint stamped "Sold" was more valuable than dollars. In the summer of 1925, people began putting "Not For Sale" signs in front of properties they intended to keep.
Before long, however, Florida began to choke on its own growth. In 1925, more than 2,000 freight cars were waiting to be unloaded in Miami. In August, the single railroad operating to Florida announced it could accept no more freight except fuel, livestock and perishables. Stocks of building materials soon ran out. Then, "two hurricanes showed what a soothing tropic wind could do when it got a running start from the West Indies," as Frederick Lewis Allen put it in his history of the 1920s, "Only Yesterday."
By 1927, those who still had money to gamble left Florida for a safer game: the stock market.
Copyright © 2005 Associated Press, Cynthia Crossen. All rights reserved
Ohh and by the way, if Fannie has delayed again its accounting restatement until next year and must hire 1500 consultants to clean up this mega-giga-mess, what does it mean???
Also today the average savings rate in america is ZERO and if you look at the DOW index, it has remained between the 10,000 and 11,000 benchmark for the last 5 years... do you see anything wrong with this picture? I hope you do!!!!
Conclusion: those who ignore history are doomed to repeat it.
Keep and eye on the upcoming US real estate crash http://www.moneyfiles.org/housingcrash21.html
Conclusion: those who ignore history are doomed to repeat it.
So what are you recommending as a place to store wealth?
I never have understood the rush to Florida. It's one of the most inhospitable and miserable places in the country.
I'm writing this to you as the morning sun is rising over the blue-green waters of the Atlantic Ocean, about 200 yards from my computer. I might take a walk on the beach in a little while to wake up.
Today I'll drive along A1A to run a couple of errands and be slightly frustrated at all of the old folks and how slowly they drive, but will also chat with several of them that work in the stores. They're a nice bunch, seemingly always talking about what their grandkids (my age) are doing.
Tomorrow, I'll be on a pontoon boat cruising up and down the Halifax River drinking beer, listening to music and casting the fishing pole now and again. The weather will be nice for the most part, with maybe a thunderstorm or two in the afternoon to cool things down.
My part of Florida's quite a nice place. It's a rough life, but someone's got to live it. :)
Not here in Ormond Beach. The water's drinkable right out of the tap. Guess it depends on where you go in FL as to your experience.
and they useful-idiots are still buying swamp land and crying when they flood from a storm!
But now, thanks to the lawyers, judges, politicians, they can force everyone else in America to subsidize their stupidity by raising the nation's insurance rates!
Ask Bruce Williams! He hates people on assistance but feels it's great his insurance on his beach house is subsidized by someone in Arizona!
Hey now, I resemble that remark.
They renamed Mosquito Inlet: Ponce Inlet, not Ponce deLeon Inlet. I spent the days of my youth in this area working on the fishing boats They should have left the name Mosquito Inlet!
I loved this area as a young man, but it is now so crowded and full of rude people all in a hurry that I could not imagine living there again. I last visited about ten years ago, and I don't know if I'll ever go back.
I dont know money to be made in stox house doing well employment easy to get and interest rates nice and low,
always ask yourself, "what is the AP trying to make me think by running this story?"
Yeah, when I was in HS we used to drive to New Smyrna in the middle of the night and sleep on the beach until sunrise. It's now like a parking lot from Orlando to there.
Regarding underwater lots, they're still selling them - and buying. Actually, what has happened is that during periods of drought low lying areas that are ordinarily under water, or close to it, are quite dry and the local governments turn a blind eye to building on them. Normal rainfall returns 10 years later and bingo we got lots of flooded homes and property.
Matter of fact, a couple of years ago, here in Lakeland, there was a picture in the paper of a house in town with water up to the roof! Caption read, "....built on a dry lake bed..." Now why did the local authorities approve building on a lake bed? Lotta palm greasing going on.
We natives cannot be held responsible for the actions of the carpetbaggers who have transplanted themselves here. No offense to any Northerners; no FReeper would behave that badly. (I hope.)
"do you see anything wrong with this picture? I hope you do!!!!"
Nope, everythings just peachy and will continue to be so into the forseeable future. I heard it right here on FR.
Let's get some fact straight here...
When Fannie Restates it will most likely INCREASE it's profits.
The saving rate is Zero using the old 1950's definition. It does NOT include 401K balances, wealth stored in property, nor IRA's. The definition needs to be revised. According to the old definition I have saved less than 1% of my income. In reality it is more like 40%.
What he's clearing is what's grown up since 1965, the last time a developer went broke on the same swamp.
Magnificent waterfront opportunity in the swamp = The End Is Near.
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