Despite signs that the market is slowing, luxury home prices in Los Angeles, San Francisco and San Diego reached record highs during the third quarter of 2005, according to the First Republic Prestige Home Index, which tracks homes valued at more than $1 million in key California markets. In Los Angeles, the value of high-end homes continued to appreciate at a quicker pace than other markets in the state, with prices climbing 17 % compared with the third quarter of 2004.

The values of luxury homes in San Francisco and San Diego also recorded double-digit gains last quarter, rising 12.9 % and 11.6 %. According to the index, the average luxury home in San Francisco is now valued at a record $2.85 million, the highest average luxury home value in the state, while the average luxury home value in San Diego has nearly doubled in the last five years, rising to $2.07 million during the third quarter of 2005.