Answer:
The correct answer is A. The long-term effect of speculation on Florida was that many people could no longer afford to live there.
Explanation:
The 1926 Florida boom was a land speculation wave that hit the state of Florida in the 1920s and ended abruptly in 1926.
In the 1920s, the American people had a strong desire to become rich very quickly, preferably with as little effort as possible in physical work. During the same years, US prosperity was growing, and so some people believed that part of that wealth would be invested in the coastal areas of Florida that, with its mild weather and good bathing beaches, seemed suitable for vacationers from the northern states. As a result, land prices in and around Miami, Miami Beach, Coral Gables, and along the entire East Coast northward until Palm Beach began to rise. Speculators here quickly found an object that seemed suitable for quick profit, and the result became a veritable speculation wave.
First of all, the land was cut into small pieces of land that could then be sold. As demand was very high, the value of these plots rose rather quickly and reached considerable prices at the time: within 60 miles of Miami, inland plots were sold for between $8,000 and $20,000, coastal plots for $15,000 to $25,000, and actual beach grounds from $20,000 to $75,000. However, the land deals that happened were not real. They sold with 10% down payment and soon switched to using "binders": it was not the land itself that was bought, but the right to buy the land at a fixed price that was bought and sold. Thereby, "binders" gained value as a speculative object, because of the rising prices after a short time, they could be sold at their new and higher value, that is, the land speculator cashed in the sale in the meantime the increase in value.
The land speculation took a decisive upturn during 1925: more and more plots were being plucked and at an increasing distance from the coast. Even land unsuitable for settlement - bogs, swamps and scrub forests - was included in the speculation.
In the spring of 1926, however, demand began to decline, but in the first instance the property speculators succeeded in keeping the speculation wave alive. In the fall of 1926, however, Florida was hit by two hurricanes, the worst of which, on September 18, killed about 400 people, demolished the houses, and flooded Miami's streets. This put an end to speculation, and brought back the land to the farmers who had originally sold them.
