SAN FRANCISCO-Luxury home values in San Francisco, Los Angeles and San Diego increased in the third quarter compared with last year, according to a report from First Republic Prestige Home Index. Values climbed 10.4% in San Francisco, 14% in Los Angeles and 13.5% in San Diego.

"Luxury home prices were strong both year-over-year and for the third quarter in San Francisco, Los Angeles and San Diego," says Katherine August-deWilde, president and COO of First Republic Bank. "Luxury communities in California's urban coastal areas continue to experience limited inventory and strong demand from US and foreign buyers."

San Francisco is one of the leading housing markets in the country, and values for luxury homes continue to increase year after year. With the 10.4% increase, luxury home values now average $3 million, the highest since Q1 of 2008. The areas around San Francisco also showed increases in luxury home values. In the Menlo Park and Palo Alto, luxury housing prices average $2.1 million, and the submarket is seeing an increase in all-cash and foreign buyers.