Investing in Florida real estate now is a real roller coaster ride. With all the issues the economy has today, you don't really have a sure though if your investment would go up or down but it was not always this way. In the 1920's Florida underwent a real estate bubble. Because of this, prices of real estate skyrocket before everyone would know. Florida then was the hottest spot for investors during that time.
What Caused This Real Estate Bubble?
Since America was in a time of great prosperity during the 1920s, working Americans had jobs that provided numerous benefits such as paid vacations, insurances and pensions. Cars were greatly increasing in number that roads all over America were clogged of traffic. Likewise, railroads and air travel became exhausted due to the rapidly increasing number of people able to access it.
This good fortune became the key reason for the Florida real estate bubble. Since people had money to spend, everyone had their eyes on Florida real estate since at this time, Florida was still underdeveloped and the trend of high living in Florida which we can see now was still being popularized during that time. The high income of people combined with the huge demand and rather short supply caused the real estate market to boom.
Issues On The Florida Real Estate Bubble During The 1920s
Miami as we see it now is a solid product of the Florida real estate bubble. This real estate bubble also created cities out of the everglades which still exist today. This real estate bubble pushed Florida to develop further building more and more bridges roads and streets to cope up with the activity of the real estate market but even with this seemingly good fortune, presses began to show pessimistic views regarding it.
In 1925, negative views on Florida real estate were beginning to spread like wildfire. Forbes magazine warned that Florida real estate prices were only based on the expectation of finding a client and not on the real value of land and the IRS began to criticize it as a giant sham operation. Sales on real estate then began to slow down as it was more difficult to find buyers for real estate.
What Happened After
Florida real estate was unlucky as the slowdown in sales was immediately followed by the 1930s recession. It has not recovered for decades. Fortunately it has later recovered restoring its hotspot status which it still has until today. Now, every investor seems to have Florida real estate in his vocabulary.
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