The Great Depression and its Impact on Mortgages
Whether you're a potential homeowner or an investor, it's important to understand the history and context on the mortgage market today.
3 Min
The Florida land boom of the 1920s was a confusing time of rushed payments and broken promises. Drive around Miami and all the way up to Palm Beach county, and you’re bound to see a handful of older homes from the 1920s and ‘30s.
If you go to the US Census, you’ll find that 51,932 of the 2,562,497 housing units across Broward, Miami-Dade, and Palm Beach counties were built in 1939 or earlier. That’s about 2% of all housing structures in Broward, Miami-Dade, and Palm Beach counties.
To be specific, 3.2% of Miami-Dade housing units (33,270 homes) were built in 1939 or earlier. Meanwhile, close to 1% of homes in Broward (7,789 units) were built in 1939 or before. Lastly, 1.57% of Palm Beach county homes (10,873 units) were built in 1939 or earlier.
These older homes are a testament to a time when the Florida land boom made plots of land cheap, optimism was high, and speculation reigned freely.
The 1920s were a period of prohibition, cultural innovation, and great economic unrest. Unethical to a tee, sensationalist news and speculation fueled a national obsession with buying land in Florida. Thousands of people invested in Florida land by mail, drunk on the idea of becoming rich by flipping land for a profit.
People bought with open checkbooks and closed eyes. Many people didn’t even know what their land looked like—they simply assumed that the plot would live up to Florida’s selling point as a “sunny paradise. People ended up buying patches of swamp without even realizing their bad investment, they were buying land through mail after all.
Everyone was under the Florida land boom’s spell. But as the housing bubble grew and the price of Florida land became so inflated that it began to discourage buyers—the land boom of the 1920s was about to go bust.
The land boom gone bust plunged Florida into a Depression four years ahead of the rest of the nation. Later on, two hurricanes swept through the state at category 4 levels, decimating the state economy even further.
The 1926 Miami Hurricane made landfall as a Category 4 hurricane. The storm surge flooded Miami Beach, and its strong winds destroyed about 4,275 homes in the area, damaging another 9,100 homes, and displacing 25,000 people.
The 1928 hurricane hit near Jupiter and Boca Raton as a Category 4 hurricane. During this hurricane, it was the weeks of flooding that killed about 2,500 people. It was one of the deadliest hurricanes in American history.
Not only that, but the threat of the Mediterranean fruit fly cut Florida citrus production by 60%. By the time the Great Depression rolled around, South Floridians were used to being down on hard times.
Because of the thrill of the get-rich-quick schemes of the Florida land boom, homes built in the 1920s and ‘30s come with a certain sense of tragedy and optimism. They were built at the peak of the land buying frenzy—and their architecture reflects the high expectations of their owners.
Homes built in the ‘20s and ‘30s were mostly designed in the Mediterranean Revival style of architecture. Inspired by Spanish, Italian, and Moorish architecture, these home designs were broad and sweeping—as romantic and idealistic as their builders.
In 1920, Miami-Dade county’s population was 55,363. Once the land boom went bust, Florida land sellers were stuck with overpriced parcels of land. And after the hurricanes that pummeled the state over and over again, it seemed to be over for Florida in terms of development—but that was in 1925. The county now has about three million residents, a 98% increase in the past century alone.
The bones of the communities left behind are now the thriving communities of Coral Gables, Hialeah, Miami Springs, Opa-locka, Miami Shores, and Hollywood. And you can still find the following home styles within their city limits today.
Appearing in France just before WWI, the Art Deco buildings are known for their sleek, linear appearance. They often have stylized or geometric ornamentation. Chevrons, zigzags, and other geometrical motifs are common forms of ornament on Art Deco style buildings. Art Deco style was seen as a rejection of historic precedents in its use of new construction technology.
Great examples of Art Deco architecture can be seen on Ocean Drive.
This architectural style was mainly used by immigrants from the Bahamas who settled in places like Overtown. Here, they built homes with gabled roofs and weatherboard siding that distinguish them from your average Miami home. The homes are often raised off the ground to provide air circulation.
This style of home building was developed by Bahamian immigrants who first landed in Key West. Used to building boats, Bahamians built homes in a similar fashion. They created clapboard homes with timber (and later) balloon framing. The fact that these homes are raised up on posts to allow for air to circulate within the home have made Conch homes popular in tropical climates.
Going back to buying land through the mail in the 1920s—people bought homes too. It was common, at the time, for people to buy land in Florida and order a home to be built from a catalogue like Bungalow Magazine and The Craftsman or ordered a kit from a catalog such as Sears, Roebuck & Company. Local carpenters built the homes so that buyers would be ready to move in once they arrived.
Bungalows are cottages with wide, sloping roofs, and porches.
The Mediterranean Revival style defined Miami during the Florida land boom of the 1920s. Because of its elaborate detailing, such as twisted columns, railings, and balconies, the Mediterranean revival style worked best on large buildings.
The style reflects Mediterranean architectural influences such as: Italian, Byzantine, Moorish themes from southern Spain, and French. Theatrical baroque decoration is normally used throughout the home, giving it a classical look similar to Renaissance architecture.
Today, there are thousands of homes within Broward, Miami-Dade, and Palm Beach counties. They’re a far cry from the imposing high rises that are now becoming the trend here in Miami.
If you’re lucky, you can find these homes in the middle of all the noise of stainless steel and blinding white. There’s something about being able to appreciate the history of these older homes. You can feel the creak of an old varnished wood floor, or enjoy the view from a small terrace that’s no longer a de facto feature built into today’s new homes.
South Florida is no longer the place of wishful thinking. Now that Miami and the rest of South Florida have become bustling focal points for trade, export, and international business, it’s a far cry from its humble beginnings.
But older homes offer the kind of charm that can’t be recreated. They’re well built buildings full of history, and they carry the cultural and architectural history of the Magic City we all know and love.
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