By Town Crier Staff Report

First Republic Bank of San Francisco Prestige Home Index reports that if you purchased a home in 1985 for $578,548, it is worth $2,225,161 today.

Using regression analysis and calculated for each year including the third quarter of 2000, California luxury home values are experiencing the largest gains of the year.

According to the index, the average value of a Bay Area luxury home during the third quarter of 2000 jumped 14.5 percent over the previous quarter and passed the $2 million mark for the first time in the history of the index.

Stock market fluctuations did not appear to affect the luxury home market during the third quarter, and Bay Area real estate brokers expect the market to remain strong through the end of the year.

“Though more sellers seem to be taking advantage of the appreciation of their properties, there are still more buyers than sellers, and buyers will be looking at properties during the holidays,” observed Betty Brachman of Pacific Union Bank in San Francisco.

Peggy LeDoux of Cashin Company in Burlingame, said “In 1999, we saw some of the highest increases in average sales prices in more than 20 years.

The First Republic Prestige Home Index™ in each market is based on a portfolio of individually selected, single-family homes that have had their value traced back to 1985. For each home in the portfolio, a market evaluation was performed for each year, taking into account repeat sales, comparable sales, and characteristics such as house size. The process is similar to one real estate appraisers use.