Well tradelite, I’m not sure how to respond to your post as it doesn’t seem to have any relevance to my post to Elroy. However, << Year of purchase and value at the present time would be of relevance, seems to me.>>
I can only respond by repeating that old saying…”If we don’t learn from past history we’re doomed to repeat it”. Contrary to popular belief, real estate can loose value. Indeed, it happened in South Florida during my lifetime and as a general contractor in the State for 28 years.
<< If they hadn't bought at the absolute bottom, wouldn't they still be pretty rich today if still holding the property?>> Assuming they paid cash and did not finance with the easy credit that was available (much as today), and yes, after waiting decades << held for a considerable amount of time>>, they would eventually regain their original cost of the property (at a much depreciated dollar).
<< One can ALWAYS find an example of spectacular success, but average success is more interesting and relevant to the average person. >> Seems to me the average person today is up to their butts in debt, credit cards, autos and toys, all financed by divesting equity in their domiciles by refinancing. Average success, I would say, live within your means, make it a goal to be debt free and preserve capital. Not a very popular way to go today.
As for history, I’ve learned not to compare, but to identify. Here’s a little history from floridahistory.org
Two important elements played roles in the Florida land boom. For the first time Americans had the time and money to travel to Florida to invest in real estate.
It was also important that millions of Americans were captured by the materialism and prosperity of the times, which seemed to indicate that anyone could become rich by simply investing in the proper instrument of instant wealth. Florida land appeared to be in 1921 one of those instruments of future success. It didn't matter if you lacked the money, credit was easy to obtain, with economic prosperity and a good job.
A COOPERATIVE GOVERNMENT
Just as the Republican administration of Warren G. Harding promoted lower taxes and greater business prosperity, the conservative state governments of Florida in the 1920's acknowledged the need to improve the state's transportation and public services to accommodate this boom of big spending visitors. The State of Florida also considered borrowing money regardless of the high interest rates to be essential to maintain the expected growth of new residents and tourists.
Northern newsmen glamorized the early Land Boom in Florida with stories how land investors had doubled their profits within months. The real estate firm soon realized that it was more profitable to sell land by auction rather than set a price. As land prices rose, the greater the desire for profit seemed to increase.
EVENTS AND WARNINGS
There was plenty of evidence that the Florida Land Boom was on swampy ground. 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, losing money over Florida investment, attacked the entire operation as one great sham. By 1925, there were other signs. Companies were laying off construction and other blue collar workers while the number of realtors and auto mechanics was still increasing.
THE GREAT FLORIDA LAND BUST
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. Suddenly, the only market for Florida land was for selling land. |
