Condo sales in Panama City Beach in 2011 started out strong with steady increases in sales through May, culminating in a high of 118 units sold that month, making this the start of a solid year for condo sales in the area. This has not carried forward into the traditionally strong month of June, which may well prove to be a good thing. Normally, sales in June and September surpass the previous month but this has not materialized in 2011. While overall sales volume exceeds 2010 figures, June and July sales exhibited a downward trend with 94 units sold in June and only 67 selling in July.

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In the September 2008 Market update I reported the outstanding developer inventory according to Bay County Records.  I thought I would take another snapshot of the market.  Many things have changed.  Some of the inventory has changed hands.  I am now simply going to refer to the units as "Remaining Units".  A number of the condominiums do not have the ability to sell the remaining inventory freely.  Some are tied up in litigation.  Others are held by institutions or entities that are choosing to hold the inventory.

Most of these condominiums have detailed stories behind the sales and pricing.  I am not going to get into any specifics here.  Aqua, Palazzo, Ocean Reef, Grand Panama, Tropic Winds, and Origin at Seahaven have been selling off inventory.  Aqua and Grand Panama just recently offered new pricing. 

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Well, not exactly.  Tropic winds actually has some of the best financing available without any of those annoying 1% points upfront, but we will get to that later. The secondary market (the people who actually buy the mortgages from the banks you loan from) has added Tropic Winds to their list of condos in Panama City Beach they will not finance. Our current list includes:

Laketown Wharf
Shores of Panama
Origin at Seahaven
Tidewater
Emerald Beach Resort
and now Tropic Winds

Tropic Winds was added because only a handful of owners have currently closed on the building. This condominium just completed construction in February and preconstruction contract conversions have been challenging for years now.
The developer of Tropic Winds has had several condominium projects in Panama City Beach, including Ocean Villa, Ocean Ritz, Tropic Winds, Emerald Isle, and Ocean Reef. The two bedroom floor plans are almost identical in every building. Even with credit tightening again this past January, we have seen a natural absorption rate in the mid to upper 200's for most of these two bedroom floor plans.
This building has no debt. No construction or land loans. This building is completely capable of taking its time and selling at a normal market pace. The only challenge came recently when the banks decided not to offer any more loans there. I really wasn't surprised to see a private investor show up. This private investor is offering loans at slightly lower interest rates than the banks without charging an origination or discount point.
We are likely to see the banks come back to the table after a certain percentage of the units close in this building. As long as the private investor is around I don't think anyone will pay much attention. After all, who wants to pay points on a loan with a higher interest rate?

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And then there were none.  Tropic Winds marks the end of preconstruction condominium projects in Panama City Beach for some time to come.  With Tropic Winds' CO (certificate of occupancy) being issued this week, we now have no more resort style condominiums under construction.  Some could argue that Island Reserve and Cabana Cay are still building out and will be the last two official condominiums in Panama City Beach under construction.  I believe we can all agree that neither of these projects can claim any type of gulf frontage or view. 
We still have a significant amount of developer held inventory.  Some of this inventory is selling at a normal pace.  We are also starting to see new signs of the market bottoming in certain buildings and floor plans.  This should not be confused with a bottom in the overall market.  We have buildings that are selling units every quarter at a price people are willing to pay.  We also have buildings that have not seen buyers in well over a year.

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