There's a dead Canary in a Florida McMansion

[mswas]

Florida land boom of the 1920s

So I’m going to just take it for granted that you’ve been reading about Florida’s real-estate bubble, by far the worst hit state of the mortgage crisis.

So, let’s talk about parallels between early twentieth century development vs late 20th century development.

Were there widespread real estate bubbles bursting around the nation at the time?

[wonder9]

I have nothing to offer but I’m going to be watching this thread. I think this is a fascinating question and I am so interested to see what the discussion brings.

[BrainGlutton]

Two differences come to mind immediately:

1. The 1920s boom was punctured by purely material problems such as the cost and difficulty of transportation to and within Florida, which no longer apply. We even have universal electrification and air conditioning now. Materially there are no obstacles to development, development, development (at least, not until the cheap oil runs out). The current bust is all because of purely artificial, financial conditions.

2. The 1920s boom was all speculation about potential development that never materialized. In the current bust we’re dealing with the declining value of things that actually did get built.

[Bryan_Ekers]

Huh. I thought this was going to be about some guy in Witness Protection living high off the taxpayer until somebody tracked him down and plugged him.

[E-Sabbath]

I think the topic is completely Cocoa-nuts.

[BrainGlutton]

@E-Sabbath

I think the topic is completely Cocoa-nuts.

But why a duck?

[Little_Nemo]

I always figured there had to have been a few people who were too stubborn to admit they were wrong when the Florida Land Boom collapsed back in 1925 and held on to their land. In the long run (as defined by several decades) they would have shown a profit.

[mswas]

So no one knows what the real estate situation was like elsewhere in the 20s?

[GIGObuster]

@E-Sabbath

I think the topic is completely Cocoa-nuts.

http://vimeo.com/2978287

GROUCHO MARX: Florida, folks. Sunshine, sunshine. Perpetual sunshine all the year around. Let’s get the auction started before we get a tornado. Right this way. Step forward, everybody.

Eight hundred wonderful residences will be built right here. Why, they’re as good up, better. You can have any kind of a home you want to. You can get even get stucco. Oh, how you can get stucco…

For a depressing (or good places to look for offers if you are the fortunate few capable to look for housing) check the interactive maps from Hotpads:

http://hotpads.com/pages/features/foreclosures.htm

There is a sea of red houses out there, and this ain’t Monopoly.
As for the past:

http://www.usnews.com/articles/business/real-estate/2008/02/28/comparing-todays-housing-crisis-with-the-1930s.html

Not so wonderful. Hard numbers on exactly how far home prices fell nationwide aren’t known. (Government records go back only to the 1950s, and even then they’re a bit sketchy.) Yet the government has kept statistics on the number of new homes built since the 1920s. At its peak in 1925, the roaring economy—the same one that helped George Bailey put scores of poor families into new subdivisions in the movie It’s a Wonderful Life—produced about 900,000 new homes a year. By 1933, around the time Old Man Potter tried to get his hands on Bailey’s cash-strapped Building & Loan in Bedford Falls, that number had fallen to about 100,000 new homes, a 90 percent drop.

That’s about twice the size of the percentage decline in home building seen so far in the current downturn.

…

That, of course, doesn’t mean he thinks things won’t get as ugly as they did, say, in Los Angeles during the early 1990s. After a real-estate boom that nearly doubled home prices between 1985 and 1989, sales volume began to slump as big layoffs in the aircraft and defense industries crippled the local economy. The decline—about equal to the sales falloff in the current downturn—took about three years to hit bottom in 1991. Only then did prices, too, begin to fall. By the time the housing market stabilized five years later, home prices had fallen by about 27 percent in nominal terms and by 45 percent after accounting for inflation.

Of course, what’s different this time around is that the downturn isn’t just playing out in Los Angeles but is hitting almost every major metro area. Yet perhaps the greatest contrast with past housing downturns is that this one has come while jobs are plentiful. No housing bust in memory has come without corresponding job losses. This time, “there’s a disconnect,” Leamer says. “No one I know thought that we’d have two years of a housing correction without an economic recession.”

[GIGObuster]

Missed the edit window:

Of course, the cheery tone regarding jobs was because the article from US News came from early 2008.

[iamthewalrus_3]

@GIGObuster

For a depressing (or good places to look for offers if you are the fortunate few capable to look for housing) check the interactive maps from Hotpads:

http://hotpads.com/pages/features/foreclosures.htm

That link is suspect. I’m not saying that there aren’t a lot of foreclosures, but I checked around where I live, and there are a few that are simply too good to be true. Of course, when you try to get any more information about them, you’re funneled to a site where they want you to enter your credit card number for a “Free” membership trial. No thanks.