The walk-in closets at 3 Indian Creek Island Rd. are the size of a studio apartment. Aspiring American Idols can lay down tracks in the customized recording studio. Need a workout? The place has its own fitness center.

But what sets this palace apart from even its most exclusive peers are the little things, like the glass-enclosed wine chamber protected by a thumb-print security system that’s right out of a spy movie.

The owners originally were asking $60 million, but the price has been slashed to just $52 million — still the most expensive listing ever in South Florida.

While your home may have lost half its value in the past five years, ultra-elite properties like 3 Indian Creek, and Ricky Martin’s sumptuous, 10,000-square-foot North Bay Road estate, which sold two weeks ago for $10.6 million, are in strong demand.

Earlier this year, a Connecticut billionaire dropped $38.5 million on another Indian Creek property — the highest price ever paid to date for a South Florida home.

And even though the foundation won’t be laid until this fall, more than half of the mega-condos at Sunny Isles Beach’s Mansions of Acqualina are spoken for — at prices ranging from $5 million to $50 million.

“More million-dollar homes have gone under contract this year than any time I can remember,” said Riley Smith, an agent with Esslinger-Wooten-Maxwell (EWM) Realtors. “And I don’t think it’s going to slow down anytime soon.”

Paying cash for

a third home

Up and down the South Florida shoreline, the super-high end real estate market is on fire, say the developers who build the homes and real estate brokers who sell them. While Wall Street turmoil kept many would-be buyers on the sidelines for years, they’ve since reentered the market with confidence.

Most are out-of-towners, wanting a second, third or even fourth home.

Nearly all pay cash — regardless of how high the price.

And as the latest industry data indicate, they’re willing to pay more than at any point in recent years.

Ron Shuffield, Smith’s boss at EWM, said his firm has sold a million-dollar property every 18 hours so far this year. Four out of five condo deals in that price range have been cash transactions. And with demand spiking and inventory relatively flat, prices have soared.

Last year in Miami-Dade County, where South Florida’s10 biggest-ticket sales since 2010 occurred, there were 170 homes and condos sold for at least $3 million, the point where many say the luxury market begins. That’s about the same volume as in the peak years of 2005 and 2006, and way up from 103 such sales in 2009.

Since late 2010, the sales price of these single-family homes and condos has jumped from about $700 per square feet to more than $900.

These figures come courtesy of Coldwell Banker, whose star agents — Jill Eber and Jill Hertzberg — closed $280 million in real estate transactions in 2011, and have rung up $80 million so far this year.

The Jills, as they are known, are now chasing history. They’ve been tasked with selling 3 Indian Creek, the 10-bedroom, 10-bath, 30,000-square foot fortress situated on two acres of bayfront property. While Eber said she had signed a confidentiality agreement, she did suggest that the property will likely sell in the coming months.

It helps that the market for Indian Creek, the private 86-person village that’s home to Julio Iglesias, Don Shula and Norman Braman, has been set by a flurry of recent sales.

Bad quarter for Sears, not its boss

Most notable was the 17,000-square-foot estate bought by billionaire investor Eddie Lampert, who scrounged up nearly $40 million even as his Sears Holdings lost $2.4 billion in the last three months of 2011. Even vacant lots in the neighborhood run to at least $14 million, and Iglesias recently bought the home adjacent to his estate, merely for the right to tear it down.

“In the last three years, these people stopped making decisions, because of the economic uncertainty,” said Jorge Uribe, the Sotheby’s agent who handled Lampert’s purchase. “They were still very wealthy, but didn’t feel comfortable. They do now.

“The phenomenon we’ve seen in the last year has been, we’d see one transaction, then two, then three,” Uribe added. “Then all of the sudden they say, ‘Oh my god, I have to jump in and get my house before someone else does.’ ”

While factors like a weak dollar and decreased prices are helping to fuel the comeback, Peter Zalewski, owner of Condo Vultures, believes there is something even more primal involved.

“I think today’s buyer is acting on ego,” he said. “My biggest concern is that there is so much bravado back on the street. This is sort of like ‘Back to the Future.’ The environment today is not too different than during the boom.”

In Miami-Dade, the hot spots are well known: South Beach; Gables Estates; Star Island; Key Biscayne. Prices are mostly still off their all-time highs, motivating the shrewd and affluent to pounce on good deals before they vanish.

Audrey Ross is a real estate agent whose focus is Miami’s luxury market. Since January, Ross has facilitated two deals of at least $15 million, including a 2 1/2-acre property in Gables Estates hugged on two sides by Biscayne Bay.

Over in Miami Beach, the condo crash’s dog days have given way to a bull market. Mandarin-themed MEI, a 134-unit property at 58th and Collins, saw most of its original buyers surrender substantial deposits and simply walk away, said Philip Spiegelman of International Sales Group. Four years and a significant market correction later, Spiegelman’s firm recently put the final empty unit under contract. The building has an average sales price of $1.3 million.

At first, MEI’s buyers — as with most similarly distressed buildings — were South Americans who dealt in cash. But slowly, affluent deal seekers from the New York area got courageous. They’re now roughly a third of all of the building’s owners.

“They had believed the media, who were saying that Miami was the most overbuilt city in the country,” Spiegelman said. “That wasn’t the truth, but perception became reality.”

Fifty blocks south, Ocean House South Beach has experienced a similar boomlet. The South of Fifth project was under construction when the market crashed, freezing the work until developer iStar Financial decided to target the super-rich. With just 18 apartments in the entire beachfront complex, the units range in price between $3 million and $7 million and have been selling rapidly, said real estate agent Alicia Cervera.

Yet the county’s true value is across the bay, say Cervera and others. Miami’s Brickell neighborhood was ground zero for the mortgage meltdown, with sparkling new high-rises abandoned by underwater buyers as quickly as the towers were built. In 2007, more than two-thirds of the 23,000 condos built during the boom were vacant. Today, 93 percent of those units are occupied, and some developers are feeling frisky enough to begin building again.

In March, the Related Group unveiled plans for Millecento, a 42-story high-rise to be built in Mary Brickell Village. Whereas comparable buildings in South Beach begin at $1,000 a square foot, Millecento set its price point at less than half that — with a dynamic response. As of last month, roughly three-quarters of the 383 units had been reserved, said Carlos Russo, the Related Group’s condo division president.

When demand exceeds the supply

Three blocks west, construction will begin this summer on BrickellHouse, another sky-scraping condo project that is already more than 70 percent sold, said developer Harvey Hernandez. Vizcayne, an 849-unit twin-tower project on Biscayne Bay, had about 660 available units this time last year, said director of sales Nick Grossi. That figure is now under 300.

“In the next year, we’re going to exceed the levels of 2005 and 2006, because the demand has exceeded the supply,” Grossi said. “It’s been a total reversal.”

In terms of pure opulence, nothing can match the Mansions at Acqualina, which is set to open next to its sister property, the Acqualina Resort and Spa, in 2015. The lavish, 79-unit high-rise will feature crocodile-leather closets (valued at $100,000), slick marble floors and — if you’re really loaded — a swimming pool built into your balcony.

Michael Goldstein, the Mansions’ director of sales, said his boss Jules Trump (no relation to The Donald) had a modest vision: To build the finest building on the planet, competing with London’s One Hyde Park and 15 Central Park West in New York — only two of the most exclusive properties in existence.

Warren Estis, a New York-based real estate attorney who owns dozens of properties both here and up north, was one of the first to sign on for a Mansion — but he’s going to use it as a vacation home, and not as an investment opportunity.

“Starting in December of 2010, I started seeing the prices creeping up in the better buildings — and then there were tremendous increases in 2011,” Estis said. “The high-end market has turned around, and the perception is that it’s going to keep going up.”

Developer Crescent Heights will unveil proposed designs Thursday for a large outlet mall and residential complex that could drastically alter the entryway into South Beach.

Three firms competing for a contract to design the project around the site of the abandoned South Shore Hospital just north of the MacArthur Causeway will present their visions at Miami Beach City Hall’s commission chambers — an unprecedented venue for a private event.

“We look at it as a community event and community opportunity,” said Russell Galbut, Crescent Heights’ managing principal.

In past years, the three-block project stretching north from Fifth Street and Alton Road has been discussed as a high-end shopping center.

But Galbut said Crescent Heights now plans a mall with new retail partner Paragon Outlets. Plans include public components, such as a three-acre park and a strategy to improve the severely congested intersection where Alton Road meets the causeway.

Among the solutions discussed: building a new northbound Alton Road flyover with an extra lane.

Gensler, Benoy + Add, and Skidmore, Owings and Merrill have been tasked with designing a winning plan.

At roughly 450,000 square feet of retail space, and another 200,000 square feet of condo space, the project could have long-term implications for traffic flow, city shopping and the view tourists have when they head into the city’s entertainment district from the causeway.

Galbut and the city have talked in the past about hiring a prominent architect to design an iconic pedestrian bridge over the highway in order to connect the bay walk. He and Commissioner Jonah Wolfson flew to New York several months ago to meet with an architect and discuss the idea.

“The project we’re talking about here is probably one of the largest we’ve considered in a long, long time,” Commissioner Jerry Libbin said before a unanimous April 11 vote to allow Crescent Heights to use the city’s commission chambers for its presentation.

That decision, however, hasn’t been wholeheartedly supported by the community.

Some activists questioned commissioners’ decision to allow Galbut and company to use a public space for a private project, which City Clerk Robert Parcher said was unusual and could set a precedent.

City Hall has “never been used for purely private promotion,” said activist Frank Del Vecchio.

But Galbut said Crescent Heights’ offer to invest in public infrastructure goes beyond “private” investment.

He also said Crescent Heights hopes to learn which design the community supports, and boasted in an email to Del Vecchio about the jobs Crescent Heights will create through the project.

“Our project will create over 1,900 construction jobs and provide permanent employment for over 1,800 individuals once our doors open,” he wrote. “This will create the second largest employer on Miami Beach, and well over 400 of those jobs will be management positions paying between $75,000 and $100,000 per year with full benefits.”

It’s unclear if Crescent Heights will pay rent to use the commission chambers.

Crescent Heights’ project will ultimately need commission approval.

Galbut says if the community or commission reject the plan, Crescent Heights will build a residential project.

“If we don’t get full cooperation and see a desire to move forward then we’ll back away, build a residential community within our rights and say ‘thank you very much,’ and we’ll go home.”

According to Zillow’s first quarter Real Estate Market Reports, which came out today, national home values posted their biggest monthly gain in nearly six years, and 19 of the 30 largest metros covered by Zillow have either hit a bottom, or will by the end of 2012.

The Zillow Home Value Index (ZHVI) rose 0.5% from February to March, marking the largest monthly increase since May 2006 – before home values peaked.

To further add to the good news, we expect some markets to experience substantial home value gains over the next 12 months. In the Phoenix metro, the Zillow Home Value Forecast shows a gain of 6.5% from March 2012 to March 2013. In Miami, home values are expected to climb 5.6%.

What does this mean for consumers?

“For people who have been waiting to time their home purchases close to the market bottom, it’s time to start shopping,” said Zillow Chief Economist Dr. Stan Humphries.

While we don’t expect to see national home values continue to climb at a rate of 0.5% per month, it’s safe to assume they won’t fall much further in most markets. The Zillow Home Value Forecast predicts a national bottom in home values in the fourth quarter of this year.

For further analysis, visit the Zillow Research page.

Say good riddance to the bottom of the housing market. After giving up a decade of value, home prices are on the upswing in South Florida and ahead of much of the nation, according to two key national indices released Tuesday.

Some analysts say we still have a way to go, and we could see fluctuations before we reach a real recovery.

Home values in South Florida rose 1.1 percent year-over-year in March, to $141,300, after reaching bottom in late 2011, according to Zillow’s Home Value Index.

Only Phoenix had a higher year-over-year increase, 2.8 percent.

“We’re seeing extremely encouraging market signs in both Miami and Phoenix,” said Stan Humphries, chief economist for Seattle-based Zillow. “We’re seeing home value appreciation rates which are quite frankly surprising at this stage of the recovery.”

In another report, released by S&P/Case-Shiller, Miami ranked among just five cities in the nation to show an increase in annualized housing prices in February, up 0.6 percent from January, and up 0.8 percent year-over-year.

Prices also rose in February in Denver, Detroit, Minneapolis and Phoenix.

Still, Maureen Maitland, vice president of S&P Indices said she said she is “not ready to say Miami has turned the corner.”

In Miami, prices fell 50 percent from the peak, and are just up 2 percent since reaching a low in April 2011, Maitland said.

“The trend hasn’t been long enough,” she said.

South Florida’s gains, Zillow’s Humphries said, reflect an uptick from the steep declines experienced since the economic downturn, which set values in South Florida back to July 2002.

Those floor-sweeping prices have become a beacon to investors, international cash buyers, second home-purchasers and retirees, who have led the surge upward.

‘AFFORDABILITY’

“Prices have reset a full decade in that market,” Humphries said, “and combined with 4 percent mortgage rates, that gives you a recipe for affordability, which you haven’t seen in 30 to 40 years.”

Zillow’s index predicts that values in South Florida will rise another 5.6 percent during the next year.

Prices in some communties already have jumped: Bal Harbour is up 19.8 percent year over year; Bay Harbor Islands, up 14.1 percent, and Sunny Isles Beach, 13.5 percent, according to Zillow. The prices reflect rising values particularly in condos.

And while overall prices in Monroe County remained unchanged in the past year, Key West values rose 11.4 percent, Zillow’s data shows.

On just a monthly basis, home values nationwide increased 0.5 percent from February to March, according to Zillow.

Overall, values in Miami-Dade, Broward and Palm Beach rose in the short-term, increasing by 1.4 percent from February to March, Zillow’s index showed. Prices in Monroe fell 0.2 percent in that period. The index measures the value of all homes, not just those that sold in a particular period.

Viewed separately, Broward prices rose 1.7 percent year-over-year, to $129,000, Zillow said. And Miami-Dade home values increased by 1.5 percent year-over year, to $151,800.

Additionally, homes in South Florida that sold for a loss fell to 41.8 percent, the lowest rate since November 2008. That’s down from the peak of 51.4 percent in March 2009, Zillow said.

In Miami-Dade, Realtors have tracked price increases for the past four months.

The average sales price has risen 21.8 percent for homes and 23 percent for condos in the past 15 months, said Patricia Delinois, president of the Miami Association of Realtors.

Meanwhile, the inventory of residential listings has fallen from 46,000 in August 2008 to 12,379 in March, she said.

Yet, analysts caution that while the market is moving in a positive direction, it will be some time before it can attain a healthy state.

Distressed properties still make up more than 50 percent of sales, down from more than 60 percent a year ago, said David Dabby, president of Coral Gables-based Dabby Group Advisors.

“Distressed properties are keeping a lid on prices and are going to continue to do so for an extended period of time,” Dabby said. “In a normal market, distressed sales are under 10 percent, so you can see how far we have ventured in this housing depression.”

And as distressed properties held by banks are put on the market, median prices may still drop, said Jack McCabe, chief executive of McCabe Research & Consulting, based in Deerfield Beach. More than 52,000 properties are in the foreclosure process in Miami-Dade alone, he said.

“While we’re seeing some rays of sunlight at the end of the dark tunnel, this by no means is an indication we are out of the woods yet,” McCabe said. “We still have a lot of distressed properties that need to be transacted before we can say we have hit bottom and we are headed for a positively appreciating market.”

In other parts of the nation, results were even less positive according to S&P/Case-Shiller’s index, which shows an annual decline of 3.5 percent for its 20-city composite.

In fact, housing prices in nine metropolitan regions — Atlanta, Charlotte, Chicago, Cleveland, Las Vegas, New York, Portland, Seattle and Tampa — fell to new post-crisis lows, according to S&P/Case-Shiller’s index, which tracks the value of single-family housing.

NATIONAL VIEW

Nationwide, yet another report show the housing market remains under strain, despite modest signs of improvement.

The Department of Commerce said Tuesday that the volume of sales of new homes fell in March by the largest amount in more than a year. Sales dropped 7.1 percent in March to a seasonally adjusted annual rate of 328,000 units.

That followed a 7.3 percent increase in sales in February, which was revised up from an initial estimate that February sales had fallen 1.6 percent.

The latest report on pending home sales shows Miami-Dade and Broward counties surging by 13 percent in March compared to February but moving in different directions on a yearly basis.

The report from the Miami Association of Realtors released Thursday said newly pending sales of single-family homes and condominiums in Miami-Dade County were up 13 percent month-to-month but down 5 percent compared to March 2011. The Broward County figures showed a 13.3 percent monthly gain and a 7.3 percent improvement compared to March 2011.

“We continue to see historically strong home sales activity that is driving price appreciation in Broward County,” Rick Burch, president of the Broward Council of the Miami Association of Realtors, said in a statement. “Rising pending sales point to further strength and stability in the Broward County residential real estate market.”

There was a big year-over-year drop in Miami-Dade condo pending sales of 13 percent. Single-family homes were up 7 percent on an annual basis, the association reported.

“Pending sales activity remains at strong levels and points to further growth and strengthening in a market driven by both domestic and international buyers and investors,” Martha Pomares, chairman of the board of the association, said in a statement.

Miami International Airport has overtaken New York's JFK as the U.S. airport with the most international flights, Miami officials announced.

The airport passed JFK in international flights during the first quarter this year and final quarter last year. It is averaging 1,288 international flights per week this quarter — one more than JFK, officials said.

No other South Florida airport comes close to Miami's international prowess.

Fort Lauderdale-Hollywood International handles about one-third the number of international flights per week compared to Miami. And Palm Beach International averages only four international flights per day — two each to the Bahamas and to Canada, airport officials said.

In Miami, international traffic is surging so much that the airport set a new record for passengers for the first quarter this year: 10.2 million passengers, up 9.5 percent from a year earlier. International passenger traffic jumped 11 percent and domestic passengers 8 percent over the same period last year. 

That growth comes after record passengers at MIA last year, thanks partly to new overseas routes.

More international routes are being added this year too.

In February, LAN Colombia launched service between Miami and Bogotá with four nonstop flights per week, and low-cost carrier Interjet began daily non-stop service between Miami and Mexico City.

In April, American Airlines began five flights per week to Barcelona, Spain, and it added another daily flight to Kingston to offer four nonstops per day between Miami and Jamaica's capital for summer.

A new carrier, Dutch Antilles Express, starts daily nonstop service from Curaçao in the Netherlands Antilles on May 11. 

With its palm-lined avenues, ubiquitous security cameras and upmarket boutiques, the “village” of Bal Harbour could easily be considered South Florida’s answer to Monaco. Similarly sized and equally blessed with balmy year-round breezes, this tiny community on Miami Beach’s northernmost tip is, much like Monaco, a bastion of exclusivity on one of the world’s most sought-after slices of urban seashore.

Hemmed on three sides by ocean and waterways, and spread over less than three-quarters of a square mile, Bal Harbour is equidistant to both Miami and Fort Lauderdale international airports and around 30 minutes’ drive from South Beach’s culinary and cultural scenes; yet it is a world away from its clamour and crowds.

“For years we would spend a month on South Beach but I had enough of the noise and traffic jams,” says Marty Heller, a Boston-based restaurant franchisee who owns a 1,200 sq ft hotel-condominium at the One Bal Harbour complex on the village’s northern border. “But Bal Harbour feels like a suburb of Miami ... close enough to the city for restaurants, yet I can easily visit friends for golf at Palm Beach.”

Nowhere is Bal Harbour’s aura of exclusivity more pronounced than in its highly-circumscribed real estate sector. Comprised mostly of Atlantic-front towers, with cheerful names such as the Bellini, the Tiffany and the Lanai, Bal Harbour properties have proved among the most “recession-resistant” in South Florida. Indeed, with barely 200 units on the market, and no ocean-front land approved for future development, prices in Bal Harbour dropped “just” 10 to 35 per cent during the 2007-2011 period compared with more than 75 per cent for Miami as a whole, according to Ryan Mendell, president of the Florida Condo Company, a Bal Harbour specialist.

Bal Harbour’s newest developments, including the eight-year-old Bellini, five-year-old One Bal Harbour and four-month-old St Regis, have returned to, if not exceeded, pre-recession prices, and residences across the village sold for an average of $2.1m last year, eight times greater than Miami Beach as a whole. This year’s numbers appear equally buoyant, with Bal Harbour sales up 18.3 per cent and prices up more than 31.5 per cent.

Originally established on reclaimed swampland in 1946, Bal Harbour was carefully planned to appeal to the country’s mid-century one-percenters, with deep, Atlantic-front lots, a tidy yacht club and a meticulously landscaped beachfront promenade.

However, what really put Bal Harbour on the map was the Bal Harbour Shops complex, which opened in 1965 on land previously used by the US Army as a second world war prison camp. Today, the complex’s 100 plus boutiques, which range from Prada and Chanel to Graff and Gucci, are among the country’s top performers. Back in 2008 average sales revenue for Bal Harbour Shops surpassed the $2,000 per sq ft mark, the first shopping centre in US history to do so. Today average sales revenue is up yet again, standing at $2,465 per sq ft.

While the shops may lure wealthy visitors to Bal Harbour, new-build residential developments such as One Bal Harbour and the St Regis are helping to keep them there. Both projects are mixed-use hotel and condominium complexes and they virtually “book-end” the village.

The nine-acre St Regis includes 281 residences sized from 1,800 to 14,000 sq ft and priced between $1,050 and $2,400 per sq ft, says Serge Rivera, president and chief executive of Starwood Vacation Ownership, its developer.

Half of St Regis’s units have closed and 70 per cent are under contract, says Rivera, adding that “between 60 and 70 per cent [have gone] to international buyers.” Final St Regis closing prices, according to Condo Vultures, the Miami-based real estate monitor, have ranged widely from $817 to more than $2,300 per sq ft, with $1,416 the average, and reflect the recovery of the South Florida market. Indeed, while bargains are still plentiful, prices of prime Miami apartments rose 19.1 per cent last year, according to Knight Frank’s 2012 Wealth Report.

This increase is reflected in sales at One Bal Harbour, a complex that went through a high-profile 2009 bankruptcy before recovering to near pre-recession pricing of roughly $900 per sq ft, according to Jenny Huertas, managing broker of Bal Harbour-based CVR Realty.

Despite the range and risk, buyers such as Steven Menkes, the Toronto-based real estate developer, are confident in the long-term value of Bal Harbour and premium properties such as St Regis. “Because of its limited size, Bal Harbour was shielded from much of the over-building in the rest of Miami,” says Menkes, who bought a 3,900 sq ft St Regis unit last month.

As Miami’s real estate sector barrels forward with double-digit increases, Bal Harbour’s size and limited growth should prove an asset-protector.

The lack of amenities and nightlife on Bal Harbour certainly poses a problem. With everything from cinemas to grocery stores being located on neighbouring Surfside or Aventura, seclusion comes with a price – as well as a price tag.

.......................................................................

Buying guide

Pros

● Safe, compact and well-located between Miami and Fort Lauderdale

● Extremely limited real estate market helps protect home values

● Upmarket dining, shopping and spas are all within the village

Cons

● Expensive real estate compared with rest of Miami Beach

● Limited “basic” services in town

● South Florida’s ongoing real estate “recovery” means wide price fluctuations

What you can buy for ...

$100,000 Small one-bedroom apartment in one of the village’s first buildings from 1948 ($124,900)

$1m Two-bedroom corner penthouse unit with waterside views

$10m Five-bedroom unit at The St Regis Bal Harbour with waterside views ($10.9m)

Renting used to be cheaper than buying. But in many U.S. cities that's no longer the case, as rents continue to climb and home prices stagnate.

While asking prices for homes declined 0.7% over the past 12 months through March, rents rose 5%, according to a report released Thursday by real estate listing site Trulia.

The median rent for all types of rental homes hit $1,350 a month in March, up from a median of $1,285 a month 12 months ago, Trulia reported.

"Buying a home is more affordable than renting now in almost every part of the United States," said Jed Kolko, chief economist for Trulia.

Several metro areas recorded double-digit percentage increases in rental rates.

In Sarasota, Fla., the average rent jumped 12.9% year-over-year, the biggest increase of any of the 100 largest metro areas Trulia surveyed. Miami and San Francisco saw the next biggest increases, with rent hikes of 12.1% and 11.1%, respectively.

The metro areas that sustained the highest rent increases were a decidedly mixed bag, but obviously shared one factor: rising demand for a limited supply of rental units.

Low-ball appraisal: Mortgage denied

The national vacancy rate for apartments fell 0.3 percentage points during the first quarter to 4.9%, its lowest point since late 2001, according to a separate report from Reis Inc., a real estate research firm. With such limited availability, it has put pressure on rentals of all types.

In cities like Miami that were hit hard by the housing bust and recorded a high number of foreclosures, all of the displaced residents have to live somewhere.

"A lot of people who were owners lost their homes in the bust in these places," said Kolko. Many of them turned to the rental market, boosting demand and driving up rents, he said.

Other cities have put constraints on the construction of new multi-family housing, thereby limiting supply. For example, in San Francisco, where the median rent is a whopping $2,625, there are few tracts of land available to develop, raising demand for housing and pushing rents there higher.

Several Rust-Belt cities also saw large rent increases in the past year, including Indianapolis, where rents went up 9.7%, and Columbus, Ohio, where they jumped 9.3%.

These cities have seen big gains in the industrial sector, which have led to a growing number of jobs and higher rents, said Kolko. As hiring levels off, he does not expect the big rent increases to continue.

Buying a home is cheaper than renting

Meanwhile, asking prices for homes nationwide crept lower over the past 12 months, according to Trulia.

That, along with record low mortgage rates, has made buying a home more affordable than it's ever been and a bargain compared to renting. However, many Americans will not be able to seize this historic opportunity to become homeowners, said Kolko.

Unemployed, too broke to come up with a down payment or with credit scores too battered to qualify for a mortgage, many people simply cannot qualify to buy a home right now, according to Kolko

With fewer consumers able to make the leap into homeownership, rents could continue to climb higher, he said. 

Find homes for sale

First Published: April 5, 2012: 9:59 AM ET

It was an impossible dream just a few years ago, but the selloff of Miami’s new construction inventory could be complete by the end of 2012, brokers say.

The developers behind a new wave of condominium towers either under construction or in the planning stages are motivated by Miami’s drastic drop in residential inventory.

“Right now, we’re watching the rapid completion of the selloff of the remaining inventory that was built from 2005 to 2008,” said ISG’s Philip Spiegelman. “At the pace we’re on, the selloff will be finished by the end of the year; we’ll have absorbed everything that all the pundits said would last us another 10 to 12 years.”

A recent report from Condo Vultures shows less than 1,750 units remaining under the control of their original developers at the end of 2011.

They were being absorbed at a pace of 150 developer condo sales per month, according to Condo Vultures data.

The inventory drop has caused a significant increase in Miami home prices, while the rest of the country is seeing quite a different trend – fewer sales, and lower prices.

Miami home prices rose for the third month in a row in February, led by the condo market, which saw its median sales price jump by 40.4 percent to $131,950, according to a report from the Miami Association of Realtors released yesterday.

The median sales price for single-family homes similarly increased, rising to $175,000, a 19 percent uptick.

“I think the thing that sticks out the most is the limited inventory,” said Danny Hertzberg, a Realtor with Coldwell Banker’s The Jills in Miami Beach.

That’s particularly true in areas like downtown Miami, Hertzberg said. Up until recently, there was a large number of units on the market with multiple options in each new-construction building.

“There were so many options in any given line, because they would keep reducing [prices], and buyers were only putting offers on the lowest one,” he said. “Now, there are fewer properties on the market and there are more people coming in from the sideline, who have been waiting to buy.”

According to Giancarlo Cuffia, managing director and Realtor at Engel & Voelkers in Sunny Isles Beach, the market has shifted to the degree that it’s getting hard just to purchase units.

“Most of the units have already sold,” he said. “We have to get really close to the asking price, and, in some cases, in order to get the unit, we have to go over the asking price.”

The developers behind Mansions at Acqualina, which boasts a 16,000-square-foot penthouse being marketed at $50 million, will cancel a buyer contract and keep the prospective buyer’s deposit if they were to assign their contract, the project’s sales director said.

Michael Goldstein told the Business Journal at a broker event Friday that that the people living in the building will be unit owners, not renters. The Mansions at Acqualina is being built by Eddie Trump and Jules Trump.

The stance runs counter to the rampant flipping at other projects during the pre-crash condo building boom in South Florida.

Reservations in the 79-unit project require a 5 percent deposit. The smallest units, 4,600 square feet, start at $5 million. Prospective buyers are paying at least $300,000 for a reservation and a total of 25 percent at contract, Goldstein said.

More than 40 units have deposits, with the majority of the pool under contract, he said. The project will take 33 months to complete.

The project is located next to Acqualina’s first phase, at 17875 Collins Ave., which includes hotel and condo units.

Nearly all buyers at the Mansions at Acqualina either frequent the 97-room hotel, spending, on average, $100,000 a year there, or own one of the 188 condo units in phase one, which was built in 2006, the developer said.

The custom Ornare closets that buyers can install cost about $100,000, on top of the millions they would pay for the unit. Fendi Casa, the home and design division of the ultra-luxury fashion brand, is designing the public areas, in addition to a special collection for the units in the proposed Sunny Isles Beach property.

The public areas would include onyx, slate floors and molten glass mosaic walls. The sales center door has stingray leather as an accent.

Jules Trump said the new project has responded to market demands, with larger units and windows that provide 270-degree views.

He noted that some buyers in the first Acqualina tower are now upgrading to the second phase because they love the brand and product.

Checho Vazquez, 67, a former Inditex board member, lives in Acqualina most of the year. He is a proud Spaniard and loves his homeland, but the weather here is unbeatable, he said.

Looking out at the Atlantic Ocean, only a few yards from the tower, he said: "Look at this!"