Flagler Era through Boom-to-Bust

LAND BOOM AND BUST

By the 1920s, Florida had a population of 968,470 people. Just five years later, it reached 1,263,540. What caused such a rise in the population? The 1920s were called the Roaring ’20s. It was a time when a person’s wealth and success were measured by what he or she owned, and the economy was prospering. Many people had good jobs and could buy what they needed, so businesses were making money. Buying things on credit became popular. When you buy something on credit, you buy it now but pay for it later. People from all over the United States poured into Florida to buy land for cheap prices and then sell it for higher prices. These land speculators bought land to make a profit quickly. So much land was being bought in the 1920s that this period was called the Florida Land Boom.

During the boom, some people bought and sold land in Florida without ever coming to the state. They hired young, hard-working men and women to show their land to prospective buyers. Buyers would put a binder on the contract to buy the land. A binder was a non-refundable down payment for the land. The rest of the money was to be paid in thirty days. Non-refundable means that the buyers could not get their money back even if there was a problem with the sale. With land prices rising quickly, many buyers planned to sell again at a profit before the end of the thirty days.

Sometimes the buyers did not have enough money to pay for the land, only just enough to pay the binder. If they resold their land for profit before the end of the thirty days, they had no problem. But if they didn’t sell the land, they didn’t have enough money to keep it. They lost the land as well as the binder money they had paid.

As land was bought and sold at higher prices, serious problems developed. Housing costs went up in Florida. The railway system could not transport all the building materials needed to build homes and businesses in south Florida. The land prices stopped going up, so many of the speculators could not sell their property. Suddenly, there were thousands of acres of overpriced land without any buyers. Many landowners lost everything because they could not make the final payment for the land they had bought on a binder.

The Land Boom stopped almost as suddenly as it had started, turning the Land Boom into a Land Bust. To make matters worse, newspapers told readers to stay away from Florida because of unethical and illegal land deals.
In addition to these problems, several natural disasters hurt Florida’s economy, and the state went into a depression. During an economic depression, people lose their jobs and can’t afford to buy what they need. In turn, businesses cannot make enough money. In October 1929, the United States went into the Great Depression when the stock market crashed.