Bill Bonner, back in London - on Florida Real Estate
*** In Florida, colleague Steve Sjuggerud tells us that everyone talks about making money in real estate.
"Quick quiz for you," he writes. "What year was it? Miami
had 25,000 realtors, the price of a beach lot was $800,000
(in today's dollars), and a summer issue of The Miami
Herald was over 500 pages. Believe it or not, it was the
summer of 1925.
"South Florida's real estate boom in the 1920s ended very badly. Some coastal real estate in Florida today bears a resemblance to the 1920s boom, and even to the tech stock boom of the late 1990s.
"On my island here in Florida, whenever you ask well-off
folks around here what they do, they all say the same
thing: 'I'm in real estate.' The truth is nobody's talking stocks anymore.
"If you're not 'in' real estate, you're supporting the real
estate business around here... contractors, banks,
architects, builders, etc. Outside of tourism, there is no other business here. Just like Miami in the 1920s.
"South Florida's bubble in the 1920s ended quickly. In the
fall of 1926, two hurricanes came. On September 18, 1926,
400 people died and many thousands were injured, as the hurricane ripped roofs off of houses and tossed elegant yachts into the streets of Miami.
"Oceanfront lots probably didn't hit $800,000 in today's dollars in south Florida again until the 1980s... so it would have taken at least 60 years for someone who bought at the top to break even.
"It 'feels' like Nasdaq 4,000 right now here on my
island... we're not far away from the peak of Nasdaq
5,000... " |
