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.

Luxury homes are defined as those with at least 3,000 square feet, three to six bedrooms, and three to six bathrooms. And if it’s worth less than $1 million, it doesn’t make the cut.

Just how is the market doing in that rarefied space? “For anything under $5 million, buyers are chomping at the bit because there is so little inventory,” Lea Ann Fleming of McGuire Real Estate in San Francisco said in a statement provided by the bank. “There are plenty of buyers, but there just aren’t enough houses.”

The bank’s survey found similar trends in the Los Angeles and San Diego areas, with prices down in the fourth quarter from the previous three months, but up from a year ago.

For more real estate news, check out our Square Feet blog.

Veritas Software, now owned by Symantec, has been fined $30 million by the Securities and Exchange Commission.

In a statement today, regulators said Veritas used accounting tricks to inflate revenue and smooth its earnings from 2000 to 2003. The SEC contended that Veritas used “improper round-trip transactions,” including one deal in 2000 with America Online, to boost its reported revenue. “Veritas agreed to `buy’ online advertising in exchange for the customer’s agreement to purchase software from Veritas at inflated prices,” the SEC contended in the statement. (Time Warner, AOL’s parent, agreed to pay a $300 million fine in 2005 to end an SEC accounting probe.)

The SEC said it will seek to return the $30 million to investors who were harmed by the company’s practices.

Veritas didn’t admit to or deny the SEC’s allegations. The maker of data-storage software was acquired in 2005 by Symantec, the big Cupertino maker of security software.

Cisco Systems, the giant San Jose network-equipment maker, has agreed to buy Redwood City Internet technology provider Reactivity for about $135 million in cash and assumed stock options.

The acquisition reflects a move into software and services by Cisco, which is better known for making the routers and other hardware that keep much of the Internet running.

Reactivity, which has 56 employees, provides XML (eXtensible Markup Language) gateways that we’re told makes it easier to do business on the Internet. The company’s “XML gateways enable customers to efficiently deploy, secure and accelerate XML and Web services,” Cisco said in a statement announcing the deal.

The company’s employees will join Cisco’s data-center switching and security-technology group.

Silicon Valley tech stocks: Up: Google, Oracle, Apple, eBay, Gilead Sciences and Applied Materials. Down: Cisco Systems, Intel, Hewlett-Packard and Yahoo.

Source:

http://www.mercurynews.com/mld/mercurynews/business/columnists/business_update/16750930.htm