1920’s Land Boom and Bust
Florida’s Land Boom of the 1920s
Turning $1,700 into $300,000, at Least for a While
An elderly man in Pinellas County spent his life savings of $1,700 in the early 1920s on a piece of local property. He was just one of thousands of Americans participating in the great Florida land boom. But his story differs from most – his sons committed him to a sanitarium for his action. When the land’s value reached $300,000 in 1925, the man’s lawyer got him released to sue his children. “In the 1920s in Florida the difference between genius and idiot was never so narrow,” says the Florida History Internet Center’s (FHIC) website, Florida in the 1920s: The Great Florida Land Boom.
That’s as much of that story as is told by FHIC. Whether the man went on to lock in his vast paper profit or lose it in the downturn that was right around the corner, we don’t know.
FHIC says Florida in the early 1920s “was the focus of one of the greatest economic and social phenomenon in American history.” Hundreds of thousands of people poured into the Sunshine State. “For the first time Americans had the time and money to travel to Florida to invest in real estate” and had automobiles to bring them, FHIC reports.
Land speculators who recognized this economic change bought Florida land at low prices and sold it at a large profit, according to Florida’s Land Boom, a University of South Florida website. FHIC adds that two-thirds of all Florida real estate was sold by mail to speculators who never visited the state.
The Florida Legislature and the Florida Chamber of Commerce did their parts to keep the land boom going, according to FHIC. It reports that the Legislature encouraged permanent residence in the state by passing laws in 1924 prohibiting state income and inheritance taxes. The Chamber of Commerce contributed favorable newspaper articles about the virtues of Florida land investment.
In just five years from 1920 to 1925, Florida’s population soared from 968,470 to 1.26 million, according to the University of South Florida website. FHIC reports that during this time, developers created entire Florida cities. One land boom city is Temple Terrace, adjacent to Tampa. It is named after the hybrid citrus fruit Temple (a combination of orange and tangerine), which grew in the area.
By the mid-1920s, “there was plenty of evidence that the Florida Land Boom was on swampy ground,” FHIC reports. “Forbes magazine warned that Florida land prices were based solely upon the expectation of finding a customer, not upon any reality of land value.” New York bankers who were losing money over Florida investments “attacked the entire operation as one great sham.”
FHIC continues the tale of the collapse: “In 1925, the inevitable began to occur in the real estate industry. Land prices had reached such a zenith that new customers failed to arrive and old customers began to sell their land … Caught without customers, many Realtors folded up business … The news of the Florida Land Bust crippled the tourist market. Despite the continued boom in the United States stock market, people no longer trusted buying Florida land.”
“The boom stopped as suddenly as it had started,” says the University of South Florida website.
According to FHIC, a 1926 hurricane that killed 415 and destroyed more than 13,000 homes in Florida “was an unwelcome coup de grace to the Florida Land Bust.”