Average cost for not-so-average homes up 1.5% to nearly $3 million in Bay Area

Housing prices for the wealthy in the Bay Area rose slightly last year, with the average price of a luxury home hovering at $2.92 million in the last three months of 2006, according to a survey released Wednesday.

First Republic Bank, which conducted the survey, said the price represents a gain of 1.5 percent compared with the fourth quarter of 2005. The bank evaluates luxury home prices based on an index created in 1985 that included homes valued at about $1 million.

Bay Area luxury-home prices were up 1.5 percent in the fourth quarter of 2006 compared with a year earlier. However, they dropped 1.5 percent from the previous three months, according to a report released today by First Republic Bank.

According to the banks’ Prestige Home Index, the average price of a luxury home was $2.92 million — or, to put it simply, a lot more than most of us can afford. The banks’ survey considers home prices in the Bay Area’s ritzier communities, specifically: Alamo, Atherton, Belvedere, Danville, Healdsburg, Hillsborough, Lafayette, Los Altos, Los Gatos, Mill Valley, Moraga, Orinda, Palo Alto, Piedmont, Portola Valley, Ross, St. Helena, San Francisco, Saratoga, Sonoma, Tiburon and Woodside.

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