Arial photo of Miami dated 1927, with the newly-constructed Venetian Islands visible as well as the beginning of the doomed Isola di Lolando project. (Left side of photograph.)

The U.S. state of Florida's first real estate bubble burst in 1925, leaving behind entire new cities and the remains of failed development projects such as Isola di Lolando in north Biscayne Bay. The preceding land boom shaped Florida's future for decades and created entire new cities out of virgin swamp land that remain today. The story includes many parallels to the modern real estate boom, including the forces of outside speculators, hurricanes, easy credit access for buyers, and rapidly-appreciating property values.^[1] A state of the United States (a U.S. state) is any one of the fifty states (four of which officially favor the term commonwealth) which, along with the District of Columbia, form the United States of America. ... Official language(s) English Capital Tallahassee Largest city Jacksonville Area  Ranked 22nd  - Total 65,794 sq mi (170,451 km²)  - Width 162 miles (260 km)  - Length 497 miles (800 km)  - % water 17. ... The Economist magazine cover (16 June 2005) for the article After the fall: Soaring house prices have given a huge boost to the world economy. ... Biscayne Bay separates Miami on the mainland from Miami Beach on the barrier islands of the Atlantic Ocean coast of Florida. ...

By the 1920s, economic prosperity had set the conditions for a real estate bubble in Florida. Miami had an image as a tropical paradise and outside investors across the United States began taking an interest in Miami real estate. Due in part to the publicity talents of audacious developers like Carl G. Fisher of Miami Beach, famous for purchasing a huge lighted billboard in New York's Times Square proclaiming "It's June In Miami",^[2] property prices rose rapidly on speculation and a land and development boom ensued.^[3] Carl Graham Fisher (1874-1938) of Indiana, an American automotive and real estate entrepreneur. ... Miami Beach is a city located in Miami-Dade County, Florida. ...

By January 1925, investors were beginning to read negative press about Florida investments. Forbes magazine warned that Florida land prices were based solely upon the expectation of finding a customer, not upon any reality of land value.^[4] New York bankers and the IRS both began to scrutinize the Florida real estate boom as a giant sham operation. Speculators intent on flipping properties at huge profits began to have a difficult time finding new buyers. The inevitable bursting of the real estate bubble had begun.

The Prinz Valdemar, capsized and blocked the port of Miami for several weeks in January of 1925, helping to usher in the end of the real estate boom. Florida Photographic Collection

On January 10, the Prinz Valdemar, a 241-foot, steel-hulled schooner, sank in the mouth of the turning basin of Miami harbor. The old Danish warship had been on its way to becoming a floating hotel.^[5] January 10 is the 10th day of the year in the Gregorian calendar. ...

The railroads, already strained by the burden of transporting both food and building supplies, had already begun raising shipping rates. When the sea route to Miami was blocked the city's image as a tropical paradise began to crumble. In his book "Miami Millions", Kenneth Ballinger wrote that the Prinz Valdemar's capsize saved a lot of people a lot of money by revealing cracks in the Miami facade. "In the enforced lull which accompanied the efforts to unstopper the Miami Harbor," he wrote, "many a shipper in the North and many a builder in the South got a better grasp of what was actually taking place here."^[6]

In October 1925, in an effort to improve Florida's clogged rail system, the railroad companies placed an embargo on all railway goods other than food, which further contributed to Florida's skyrocketing cost of living. New buyers failed to arrive, and the property price escalation that fueled the land boom stopped. The days of Miami properties being bought and sold at auction as many as ten times in one day were over. The first Florida real estate bubble had burst.

The next year brought the 1926 Miami Hurricane, which drove audacious Biscayne Bay develpoment projects such as Isola di Lolando into bankruptcy. The 1928 Okeechobee Hurricane and the Wall Street Crash of 1929 continued the catastrophic downward economic trend, and the Florida land boom was officially over as the Great Depression began. The depression and the devastating arrival of the Mediterranean fruit fly a year later destroyed both the tourist and citrus industries upon which Florida depended. In a few short years, an idyllic tropical paradise had been transformed into a bleak, humid remote area with few economic prospects. Florida's economy would not recover until World War II. Lowest pressure ≤935 mbar (hPa) [1] Damages $100 million (1926 dollars); $2. ... The Okeechobee Hurricane or Hurricane San Felipe Segundo SHELBY SUCKSwas a deadly hurricane that struck the Leeward Islands, Puerto Rico, the Bahamas, and Florida in September of the 1928 Atlantic hurricane season. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... The Great Depression was a worldwide economic downturn, starting in 1929 and lasting through most of the 1930s. ... Combatants Allies: Soviet Union, United Kingdom, France/Free France, United States, Canada, China, India, Australia, Poland, New Zealand, South Africa, and others Axis Powers: Germany, Italy, Japan, Bulgaria, Finland, Romania, Hungary, Burma Casualties Military dead: 17 million Civilian dead: 33 million Total dead: 50 million Military dead: 8 million Civilian...

References

1. ^ Florida Real Estate Bubble
2. ^ The Beginning of the Road
3. ^ South Florida: A Brief History
4. ^ Florida In The 1920's
5. ^ The Tropical Twenties
6. ^ Ruby Leach Carson 40 Years of Miami Beach pg. 21, 1955