LUXURY-HOME INDEX HIGHEST IN L.A. IN 11 YEARS.

Byline: Gregory J. Wilcox Staff Writer

Luxury-home values in Los Angeles jumped an annual 12.9 percent to average $1.46 million in the second quarter, the highest level in 11 years, said a survey released Wednesday by a San Francisco bank.

The Prestige Home Index, compiled by First Republic Bank, showed that the Los Angeles high-end market recorded the state's biggest annual percentage gain.

First Republic began tracking this sector in 1985. The index is based on the change in value of a sample pool of homes valued at $1 million or more in 1985 in major markets across the state.

In Los Angeles, values increased 4 percent from the first quarter. The last time Los Angeles values were this high was 1992, when the average value of a high-end home was $1.49 million.

Low interest rates and strong demand have been driving the market, according to the bank.

Prices in the Los Angeles area have been increasing since 1997, said Katherine August-deWilde, the bank's chief operating officer.

``I think it's going to remain solid,'' she said. ``I think the rate of price increases might slow, but I think the market in Los Angeles is poised to do well.''

San Diego area values gained 3.6 percent from the second quarter of 2002, also to $1.46 million. Luxury values there have soared 32.2 percent in the past three years.

Meanwhile, San Francisco Bay Area values fell 0.1 percent from the second quarter of 2002 to $2.18 million, the bank said.

Jim Link, executive vice president of the Southland Regional Association of Realtors, which covers the San Fernando and Santa Clarita valleys, said it was not surprising that the Los Angeles high-end market is strong.

Expect some slowing down, though.

``The buzz I'm hearing is if there is any cooling, it's at the high end. (Homes) are staying on the market a little longer and the price escalation is slowing a little,'' he said.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com