As the peak homebuying season ends, months of rising prices, tight inventory and competition from investors have left many would-be first-time buyers on the sidelines.

Prices are up an astonishing 31.7 percent in August from a year ago for all types of homes in the nine-county Bay Area, and for moderate-income buyers that represents a growing hurdle.

And the slice of home sales for less than $500,000 has dropped from a combined 59.1 percent to 42.2 percent in August in Contra Costa, Alameda, San Mateo and Santa Clara counties, according to real estate information company DataQuick. Homes under $300,000 are down from a combined 29.7 percent in the four counties to 15.2 percent.

Alicia Ambrosini, a corporate wellness professional in her mid-20s who is renting in Dublin, looked for a home to buy in the summer in Castro Valley, Hayward and San Leandro, while watching prices rise.

"In the past two months, I've seen a dramatic increase to the point where it's putting a condo a little bit out of reach," she said. "I have to go back and re-evaluate some of my choices."

Not only have too many condos inched up beyond her $300,000 limit, she's being "aced out" by investors whose cash offers have trumped her bid five times this season, she said.

"The price is driven up by these cash offers," she said. "There's a fair amount of frustration. I'm like many people in the Bay Area -- hardworking but getting put up against investors."

The only way some first-timers can buy is with help.

Ramy Ugarte, a 24-year-old engineering forecaster for a San Ramon company, said he was "ready to call it quits" after almost a year of looking at condos and homes and getting beaten out "on maybe 15 to 20 offers."

"When I started looking I was going for condos, and I was looking at this one complex that started at $180,000. By October they were in the $300,000s," Ugarte said.

He turned to Neighborhood Housing Services Silicon Valley. Now, he's moving into a house he bought in Hayward for $375,000, with loan assistance from a five-county program run by the nonprofit.

"It's pretty terrible out there," said Matt Huerta, chief executive officer of Neighborhood Housing Services. "It's impossible for moderate-income families."

Home affordability has dropped for first-time buyers of starter-priced homes, according to the California Association of Realtors.

The percentage of first-time buyers who could afford to buy in the Bay Area fell from 66 percent in the first quarter of 2012 to 45 percent in the second quarter of this year, the association reported.

"You need a full spectrum of workers to support a community and the big cut in housing affordability is a concern, a big concern," said Leslie Appleton-Young, chief economist for the Realtors group. "Also you've got a fairly tight rental market with no vacancy and rents going up."

The number of lower- to middle-income people who want to buy a home is actually increasing, said Kevin Zwick, CEO of the Housing Trust Silicon Valley, which offers down payment and second mortgage loans to first-time buyers. The turnout for the Trust's homebuyer workshops "is larger than ever," Zwick said, "and all of them can qualify for a home up to $500,000. They simply can't buy, because there are too few homes."

"This is the toughest market in the 13 years we have been making loans," he said. "It's never been this tough for families earning less than $100,000 a year. It's the lack of inventory that is creating this mini-bubble here. Prices will come down when there are more homes on the market."

Though inventory is improving slightly, months of rising prices sidelined many buyers, said Craig Ragg, president of the Bay East Association of Realtors and a Castro Valley real estate professional. "Many people fell out of the market because of that," he said. "There are people that had to give up, and that did give up. They just got priced out of the marketplace."

In Oakland, for example, foreclosure resales -- a source of lower-priced homes -- dropped from 18.4 percent of single-family home sales a year ago to 7.6 percent in August, according to DataQuick. And the median sale price of an existing single-family home jumped from $287,500 in August 2012 to $459,000 this August -- a 59.7 percent increase over the year.

But prices are just one challenge facing people who can only afford a lower-priced home. Interest rates are nearly 1 percent above where they were in May. In Berkeley and Oakland, "people were struggling to compete as it was, and when interest rates rose they just dropped out altogether," said Mark Biggins of Redfin. "I've seen a lot of people drop out and continue renting like they did before."

A 1 percent increase will raise a 30-year monthly mortgage payment by 10 percent, said Jed Kolko, chief economist with the online real estate site Trulia. And continuing to rent is no panacea, he said.

"Affordability is worsening both for buying and for renting," he said. "Rents are rising faster than incomes, and home prices are rising much faster than incomes."

Contact Pete Carey at 408-920-5419 Follow him at Twitter.com/petecarey.