In San Francisco, the luxury home market broke a string of three consecutive down quarters and posted a 2.1 percent increase in the third quarter of 2003, a sign that the market for high-end properties is starting to recover after several years of flat or declining prices, according to the report.

Los Angeles area values rose 17.1 percent to $1.53 million from the third quarter of 2002 and 4.5 percent from the second quarter of 2003. San Diego area values increased 6.9 percent to $1.52 million from the third quarter of 2002 and 4.3 percent from the second quarter of 2003. San Francisco Bay Area values fell 0.4 percent to $2.23 million from the third quarter of 2002, but rose 2.1 percent from the second quarter of 2003, according to the report.