We recently reported that Ice Tower in Panama City announced it was not going to be built and that they were going to refund money to the investors. Many of those investors paid as little as $1000 a sq. meter. Now current market prices are $2000 per sq. meter up to $3500 a sq. meter. This is probably more than Florida real estate at this time but if they can get it why not.
The problem is the purchases are frequently speculators also called flippers who have no intention of ever living in the units. They just buy in anticipation of higher prices and then sell to another person and then he sells to another and so it goes. It eventually is like musical chairs, the music stops and there are not enough chairs for everyone and someone gets left out and in this case left out means they can not sell the condo for more than what they paid for it. Their choices are then to walk away from the down payment which could be as much as 30% of the purchase price by completion time.
Their other choice is to fund the actual purchase at completion and hope the value appreciates over time so they do not take a loss by walking away from their deposit. This generally involves renting...
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