August delivered one of those housing reports where the headline depends entirely on which number you look at.
Closings slowed across nearly the entire Bay Area, though inventory increased, and more sellers reduced their asking prices. Yet buyers were also more competitive than they were a year ago.
The share of homes selling above listing price increased year over year in all 14 Bay Area counties tracked in the September report, and homes sold faster in 11 of them.
So what exactly is going on?
The market is cooling as we move into fall, but it is not cooling evenly. Buyers have more choices, sellers have less room for unrealistic pricing, and desirable properties are still generating competition.
That distinction becomes even more noticeable when we look closer to home, in Sonoma County and the Bay area.
The Bay Area Is Slowing, But Competition Hasn’t Disappeared
Across the Bay Area, closings declined year over year in 13 of 14 counties and fell from July in 12 counties.
Inventory also loosened with the months of supply increasing from July in 13 counties.
Taken alone, those numbers could make August look pretty soft, but now let’s get to the competition data.
The percentage of homes “selling above asking price” increased from a year ago in every one of the 14 counties reviewed! Average days on market also improved year over year in 11 counties. This tells us there may be fewer transactions happening, but buyers have not simply left the market, they are being more selective.
When the right property comes along and is priced appropriately, competition can still be very real. And that creates a very different environment from one where demand has disappeared altogether.
Sonoma County Shows Just How Local This Market Has Become
The August median sale price for a Sonoma County single-family home was approximately $810,000. But that countywide number hides some enormous differences from community to community:
Santa Rosa’s median was $744,500, approximately 2% below the prior year.
Petaluma came in at $905,250, down about 9%.
Healdsburg reached $1.13 million, up roughly 16%.
Meanwhile, some of the county’s smaller communities posted much larger percentage swings in either direction. These numbers are a good reminder that there really isn’t one “Sonoma County housing market.”
There are dozens of smaller markets operating inside it!
Price point matters. Location matters. Property type matters. And in smaller communities, just a handful of sales can move the monthly median dramatically and that is why broad headlines about prices being “up” or “down” often do not tell a homeowner very much about the property sitting in front of them.
More Inventory Is Giving Buyers Choices
One Sonoma County number stood out to us. At the end of August, there were approximately 1,290 active single-family and condo listings compared to about 312 properties in contract. That is a much wider gap than we saw during the pandemic-era market. And for home buyers, that means something we have not been able to say consistently for several years:
There are choices.
More inventory gives buyers time to compare properties, look more carefully at condition, negotiate repairs or credits, and walk away when a transaction no longer makes sense.
For home sellers, however, the same environment means pricing becomes increasingly important.
A home can still attract attention quickly but putting a property on the market and simply waiting for buyers to compete their way up to the seller’s number is becoming a much less reliable strategy.
The Higher End Is Holding Up Better
There is another trend worth watching.
Nationally, the lowest-priced segment of the housing market has been experiencing the greatest slowdown in pending sales, while higher-priced segments have continued to post stronger year-over-year activity. That makes sense when you consider what higher interest rates do to affordability.
The buyer purchasing near the limit of their monthly budget feels an interest-rate change much more severely than a buyer bringing significant equity or cash into the transaction.
California has plenty of those equity-rich homeowners and that can affect everything from jumbo purchases to bridge financing. Someone who owns a home with substantial equity may be sitting on considerable wealth while having relatively little liquidity available for their next purchase.
Which brings us to one of the interesting opportunities in this type of market.
A Slower Market Can Make Bridge Financing More Relevant
Imagine a homeowner finds the house they want. They have plenty of equity in their existing property, but that property has not sold yet.
In an extremely fast market, coordinating those two transactions may have been easier because sellers could reasonably expect their home to move quickly. A slower market however, changes that calculation.
The seller of the new property may not want to accept an offer contingent upon another home selling. Meanwhile, the buyer may not want to sell first, move into temporary housing, and then hope the right replacement property appears.
That is exactly the timing problem private money bridge financing is designed to solve!
The equity is already there – be it in their existing home or in the new potential home when the buyer has a good down payment. This particular hard money bridge financing simply allows the homeowner to access that equity before the existing property sells.
For Real Estate Agents, that can turn what initially looks like a home-sale contingency problem into a financing conversation!
Condos Are Telling a Different Story
Another interesting part of the August report was the difference between single-family homes and condominiums.
Single-family conditions generally remained stronger: Condo price reductions increased in 12 of the 14 counties reviewed, while condo days on market increased in six.
The regional numbers were also extremely uneven, though San Francisco was a notable exception. Condo sales there increased 11% from a year earlier, the median price rose 22% to approximately $1.23 million, and active condo inventory declined substantially.
Sonoma County was much more mixed.
That is worth watching through the fall, especially because August was the first month of data, following changes to condo lending requirements. One month is nowhere near enough information to determine whether those changes are affecting sales.
Seasonal slowing could easily explain part or all of the movement, and it does give us something to pay attention to as September and October numbers arrive.
So, Is This a Buyer’s Market or a Seller’s Market?
We say this is probably the wrong question. This looks increasingly like a property-by-property market.
A desirable home that is priced correctly can still attract multiple buyers.
Another property a few streets away may need a price reduction.
A homeowner with substantial equity may have financing options that a first-time buyer does not.
A condo may behave completely differently from the single-family home next door.
And one Sonoma County community can be moving in an entirely different direction than another.
That makes knowledgeable Real Estate Agents, Brokers and lenders, and other real estate professionals more valuable, not less. Because when the market stops moving in one direction, strategy starts to matter more.
The Pacific Mortgage Bottom Line
August’s numbers show a Bay Area housing market cooling into fall, but they do not show a market where buyers have disappeared.
Inventory is higher. Buyers have more choices. Price reductions are becoming more common.
At the same time, desirable properties are still generating competition, higher-priced segments remain active, and many California homeowners continue to have substantial equity in their properties.
For us, that is the part of the market worth paying attention to.
Private Money is rarely about predicting whether home prices will rise or fall next month. It is about solving a specific financing problem when timing, equity, property type, or conventional lending guidelines make a transaction difficult.
In a market that is becoming increasingly property-specific, having another financing option available can sometimes be what keeps an otherwise workable transaction moving forward.
Market data referenced in this article is based on August 2026 MLS data presented in the September 2026 Compass International Holdings Housing Market Report. Monthly median prices in smaller markets can be significantly affected by a limited number of transactions
