Three-fourths of a century have passed since South Florida’s real estate boom hit bottom. For decades, scholars opined that such a free-for-all of unbridled capitalism, and the resulting collapse, never would be repeated. Now we know better.
Here’s a summary of what we said in Pioneers in Paradise:
Few would imagine Palm Beach County and the Treasure Coast would suffer a “readjustment.” What was most surprising was how quickly and how hard everything fell. From the height of the boom, 1924 and 1925, things had started to sour even by 1926. Why did the South Florida boom crash? The list is long.
Railroads and ships couldn’t get building materials down in time. The law was catching up with the con artists and the tax man with the speculators. The nation’s stock market was getting sick.
Northern bankers, investors and chambers of commerce, watching their money exit, retaliated with negative campaigns that pointed out swindles or gouging or little weather problems called hurricanes.
Nervous speculators, in a bit of self-fulfilling prophecy, began to take the money and run. Then came the killer hurricanes of 1926 and 1928.
South Florida out-speculated its market, and demand began to drop.
When you’re selling confidence, and the confidence departs, it’s all over.
As late as 1929, the city had posted a boom-high total property value of $89 million, one and a half times the figure of just two years earlier. But it was all on paper, and it didn’t take long for the real financial picture to catch up.
In one awful year, from 1929 to 1930, West Palm Beach’s property value dropped more than half.
By January 1935, 75 years ago this month, it was down to $18.2 million, little more than its preboom 1920 value.
The city of gold hadn’t just collapsed. It was rubble.
Palm Beach Daily News file photo
In 1921, Palm Beach was expanding from its Flagler-era hotel life and developing a commercial and residential character, as shown in this aerial photograph of the Everglades Club and golf course. The height of South Florida’s real estate boom was 1924-25. But the economy started to sour shortly thereafter. And the hurricanes of 1926 and ’28 only worsened matters.