A short supply of homes for sale is stifling activity in the Portland-area real estate market.

Despite a competitive environment where certain homes are still attracting several offers, sales for the year through August have dropped 2.7 percent compared with 2016, according to new numbers from the Regional Multiple Listing Service.

The number of sales contracts in August, for deals that would close later in the year, were down 7.6 percent, leaving little room for a rebound.

But even as sales wane, prices continue to rise. The median price for a home sold last month August was $385,000, up 9.1 percent from a year earlier.

That suggests the sales slump is due in large part to a stubbornly low inventory of homes, and especially in lower price tiers.

"There's not enough to look at," said Israel Hill, a managing broker with John L. Scott Real Estate in Northeast Portland. "When you break down the price points, you find anything under $500,000, the inventory is even more shockingly low."

If August's rate continued, it would take only two months to sell all 5,940 homes on the market. Economists generally consider a six-month supply an indicator of a balanced market, with anything less indicating a strong seller's market.

Portland hasn't seen three months of supply since February 2015.

Even as population growth has accelerated, construction of new homes remains below pre-recession levels. Last year, just over 7,000 single-family homes received construction permits, compared with more than 10,000 every year from 2000 to 2006.

Homeowners by and large haven't jumped on the opportunity to sell in a hot market. Some, brokers say, are worried they'll sell their current home without finding a suitable new home to buy.

There are signs that logjam could be clearing, Hill said. Homes priced above $500,000 are sitting unsold longer. That could convince more owners to sell with confidence that they'll be able to find another home.

"Hopefully that move-up buyer will help loosen up some of the inventory," Hill said.

Buyers, meanwhile, have grown more discerning as prices have climbed.

Karim Alaeddine, a broker with Living Room Realty in Southeast Portland, said buyers who can afford it are willing to pay the higher prices, but they're also more inclined to wait for the right house to come on the market.

Where two years ago a home might have routinely attracted seven or eight offers, it might now get two or three.

"There's equal motivation, but less frenzy," Alaeddine said.

-- Elliot Njus

enjus@oregonian.com

503-294-5034

@enjus