Modest Gains in Los Angeles, San Diego and San Francisco SAN FRANCISCO, Aug. 16 /PRNewswire-FirstCall/ -- Luxury home values posted small gains in Los Angeles, San Diego and San Francisco in the second quarter of 2006, according to the First Republic Prestige Home Index(TM) by First Republic Bank (NYSE:FRC), a leading provider of wealth management and private banking services. The Index, which has tracked luxury homes since 1985, found: * Los Angeles values rose 3.0% from the first quarter of 2006 to the second quarter and climbed 12.8% from a year ago. The average luxury home in Los Angeles is now a record $2.36 million, up $268,250 from a year ago. * San Diego values grew 1.8% from the first quarter of 2006 to the second quarter of 2006 and were up 6.4% from a year ago. The average luxury home in San Diego is now a record $2.14 million, up $128,372 from a year ago. * San Francisco Bay Area values increased 0.3% from the first quarter of 2006 to the second quarter of 2006 and gained 4.8% from a year ago. The average luxury home in San Francisco is now a record $2.93 million, up $134,978 from a year ago. "Over the past year, the luxury home market in California has transitioned to a more normal, stable market in which properties sell at a more measured and less frenetic pace," said Katherine August-deWilde, Chief Operating Officer of First Republic Bank. "Luxury home values continue to increase, but at a much slower rate due to rising inventory and interest rates. Homes are being priced more aggressively to sell because buyers have more options." First Republic Bank produces the Prestige Home Index each quarter with Fiserv CSW Inc., a leading provider of automated property valuation services and home price metrics to U.S. financial institutions. Historical results of the Index are accessible at http://www.firstrepublic.com/ . Los Angeles Area Values In Los Angeles, values rose 3.0% in the second quarter, compared to an increase of 0.1% in the first quarter of 2006 and 0.7% in the fourth quarter of 2005. Agents said that the market above $10 million remains strong, although the mid tier of the luxury market has slowed. Buyers are choosier because inventory has increased markedly, and there is a greater emphasis on value. "Certainly, the white-hot market of a year-and-half ago is gone," said Michele Hall of Coldwell Banker's Brentwood East office. "We got used to homes selling yesterday, but now properties must be priced right. Homes that are in move-in condition will sell the fastest. Those that need work will take much longer." Bennett Carr of Prudential Estate Properties in Beverly Hills said the number of sales between $2.5 million and $5 million is down 20% to 30% in 2006 on the West Side of Los Angeles. However, sales between $5 million and $10 million are up 15% to 20%, and sales above $10 million jumped up 88%. "Los Angeles is becoming a national and international destination," Carr said. "The wealthy from abroad want more estate-like properties -- more than we can supply." In Orange County, homes above $5 million continue to sell well. Agent Bill Cote of Cote Private Brokerage in Corona Del Mar said sales in that price range climbed 13% compared to last year, although sales are off about 15% between $3 million and $5 million. "We've been spoiled by the market of the past few years," Cote said. "I still anticipate a solid market for the rest of 2006." San Diego Area Values In San Diego, values rose 1.8% in the second quarter, compared to an increase of 0.9% in the first quarter of 2006 and 0.7% in the fourth quarter of 2005. Agents said the upper end of the market remains robust, while the lower to middle part of the luxury market has slowed noticeably. "The upper end is as strong as it ever has been, and it's amazing the prices sellers are getting," said Ozstar De Jourday of California Prudential Realty in La Jolla. He said there have been a significant number of sales above $10 million recently. Wendy Ramp of Prudential California Realty in Del Mar said the mid-tier has clearly softened. "In the second quarter, the market stalled, although there has been a slight pick-up in the third quarter. For the past seven years, we haven't had a slowdown, and we didn't have enough product. Now we have too much for sale." She said that some sellers are reducing prices and noted that transactions are falling out of escrow at a higher rate. San Francisco Bay Area Values In San Francisco, values were up 0.3% compared to the first quarter -- the slowest rate of appreciation since the third quarter of 2004. Over the past two years, quarterly increases in the San Francisco Bay Area have been no greater than 6%. Agents in the San Francisco Bay Area said that well-priced homes in great locations are selling very well, but the market overall has weakened over the past year. "The market between $2 million and $6 million is really strong because of continuing demand," said Caroline Kahn Werboff of Hill & Co. in San Francisco. "If the house is priced fairly, you're seeing multiple offers at or a little over the asking price. Interest rates would have to get up to double digits to make a significant difference." In the high end of the market, Kahn Werboff said there have been some price reductions. She said some buyers are reluctant because they believe prices will decline. David Gowan of TRI Coldwell Banker said the market is more balanced, although slower than it has been in recent years. "Instead of selling in two weeks, properties are selling in two months, just like they would in a normal market. What we've seen the past six years is unusual." Gowan said buyers are generally making offers slightly under the asking price. In San Francisco's East Bay, the market is slowing. "Over $2 million, our inventory is up and buyers aren't in a terrible hurry," said Tara Rochlin of Village Associates in Orinda. "We're seeing more sellers willing to negotiate and lower their prices. We're headed toward a more balanced market, which is better for everyone over the long term." About The First Republic Prestige Home Index The First Republic Prestige Home Index(TM) is the first statistical model of its kind customized to measure changes in homes valued at more than $1 million in key California urban markets. Some common features of luxury homes in the Index: 3,000 to 6,000 square feet, three to six bedrooms, and three to six bathrooms. San Francisco Bay Area properties include a cross-section of luxury homes in 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. Properties in Los Angeles represent a cross-section of luxury homes in Arcadia, Beverly Hills, Calabasas, La Canada Flintridge, Encino, Los Angeles, Malibu, Marina del Rey, North Hollywood, Pacific Palisades, Pasadena, Playa del Rey, Santa Monica, Studio City and the West Los Angeles enclaves of Bel Air, Brentwood and Westwood. San Diego properties represent a cross-section of luxury homes in Carlsbad, Coronado, Del Mar, Encinitas, La Jolla, La Mesa, Poway, Rancho Santa Fe, San Diego and Solana Beach. In producing the Index, Fiserv CSW Inc. draws upon its economic database and years of experience in tracking single-family home values; collects and cross-checks data from multiple sources; achieves a weighted balance of validation elements such as repeat sales, comparable sales, and physical home characteristics; and combines this with First Republic's extensive local market knowledge. About First Republic Bank First Republic Bank is a NYSE-traded, private bank and wealth management firm. The Bank and its subsidiaries specialize in providing personalized, relationship-based wealth management services, including private banking, private business banking, investment management, trust, brokerage and real estate lending. As of June 30, 2006, the Bank and its subsidiaries had total Bank assets and other managed assets of $30.5 billion. First Republic Bank provides access to its services online and through preferred banking or trust offices in ten major metropolitan areas: San Francisco, Los Angeles, Santa Barbara, Newport Beach, San Diego, Las Vegas, Portland, Seattle, Boston, and New York City. More information is available on the Bank's website at http://www.firstrepublic.com/ . DATASOURCE: First Republic Bank CONTACT: Greg Berardi of Blue Marlin Partners, +1-415-239-7826, or for First Republic Bank Web site: http://www.firstrepublic.com/

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