Sonoma County's median home price dipped 8 percent in August as agents reported fewer buyers bidding on the same homes, possibly linked to higher interest rates.
The median sales price for a single-family home declined to $440,000 from $478,375 in July, according to The Press Democrat's monthly housing report compiled by Pacific Union International Vice President Rick Laws.
The new median nonetheless remains 14 percent higher than August 2012.
Buyers purchased 498 homes last month, a decline of 6 percent from a year earlier. Even so, sales remained above August's 10-year average of 456 homes.
Median prices almost always decline in August from July in the Bay Area, according to analysts for San Diego-based real estate information service DataQuick. Agents agreed that activity eased somewhat last month after a brisk spring, but they differed on what lies ahead.
Some maintained plenty of homes still will get sold this fall.
"This is still very much a high-demand, low-inventory type of marketplace," said Laws.
But Mike Kelly of Keller Williams in Santa Rosa said he is seeing fewer multiple offers. He predicted rising interest rates will keep many younger families from buying homes.
"There's no sense of urgency seen in the marketplace any longer," Kelly said.
The county's housing market remains on track to post its biggest year for dollar volume since 2006. To date this year, the real estate industry has closed $1.8 billion in single-family resales, an increase of 14 percent from 2012.
Housing prices peaked in August 2005 at $619,000, before crashing to $305,000 in February 2009.
This week the average rate for a 30-year fixed loan was 4.57 percent, according to Freddie Mac. That compares to 3.35 percent in early May before the Federal Reserve signaled that it may pull back on its stimulus efforts.
As rates rose this summer, "sellers finally got a little bit of a reality check," said Trish McCall, a longtime agent who this month moved her business to Keller Williams in Santa Rosa.
For much of the year, sellers benefitted as they collected multiple offers for their properties. Buyers regularly bid above the asking prices in their efforts to win homes.
But as competition declined in recent weeks, McCall said several of her buyers at last were able to purchase homes. A few sellers even have started accepting offers from buyers who must sell their own house first before they can complete the deal.
August ended with less than 900 homes on the market in Sonoma County, less than a two-month supply at the current pace of sales. That means limited selection, especially around some of the smaller towns.
"We have a huge demand and nothing to sell them," said Ann Harris, an agent with Coldwell Banker in Sebastopol.
To date this year, sales around Sebastopol have increased 30 percent from a year ago — the biggest jump among the county's sales areas.
Even so, Harris said, in the lower-priced segments of the market, "there's not the multiple offers there were before."
Pat Provost, one of four owners of Century 21 Alliance in Santa Rosa, predicted sales activity will stay strong this month. And, in the short term, rising interest rates may have a mixed effect, even prompting some buyers to get active because they decide "it's now or never."