August is often a more "sleepy" month in Silicon Valley. In 2007, the August activity was better than September, since we had the mortgage meltdown occur then, and in 2001 August was better than September for sales. But most years, August is better for buyers than for sellers in terms of closing prices.
How about this year?

Most homes in Los Gatos are in the $1,000,000 to $2,000,000 range, though there are a few homes priced lower (the lowest being about $850,000 for a single family home) and quite a few are higher (it is not uncommon to see homes sell in the $2 mil to $4 mil range, though sometimes they can sell much higher, even more than $10 mil on rare occassion).

For those somewhat typical homes in the 1-2 million price range in Los Gatos, sales prices seem to be going down. Much of San Jose has been experiencing this already, but Los Gatos real estate values have been a little insulated from the brunt of it all. Although only one home in five had been selling, those numbers are worsening. Right now there are 214 single family homes and condos for sale, but only 29 closings in those same groups in August. That nets 7.3 "months of inventory" in the town of Los Gatos. (In other words, if no new listings were to come on the market, it would take a bit over 7 months to empty the current inventory.)

For more details on the Los Gatos real estate market, please have a look at my Live in Los Gatos blog, where you'll find more information on this month's closed sales.