Lower interest rates have boosted homeownership in Santa Fe, but they also have reduced sales inventory as more families refinance and stay put.

"A lot of times if it's being refinanced, it comes off the market," said Victoria Murphy, a broker with Santa Fe Properties who serves as president-elect of the Santa Fe Association of Realtors. "Sometimes it goes back on, other times they decide to wait [to sell]."

And refinance activity isn't yet over, predicts Jeff Payne, a branch manager at Wells Fargo. He said the federal government will roll out a new program in February that should help those who owe banks more than a home is worth get in on fixed-rate home loans as low as 4 percent.

"We keep pinching ourselves to figure out if it's real," said Payne, who spoke to Santa Fe Realtors on Wednesday. "It's real."

Sharon Yermal, a Wells Fargo mortgage specialist, has seen many people who may want to sell but instead refinance to take advantage of lower rates. They do so with five-year adjustable-rate mortgages with the idea of lowering monthly payments now but with the intent of selling when the market recovers.

"Five years seems to be the timeline they're looking at," she said. "They're not looking for it to happen in the next year or two."

Sales figures released by the association Wednesday indicate that the inventory of properties for sale is down 30 percent from two years ago, while new listings are down 18 percent over the past 12 months.

At the same time, residential sales rose 10 percent in the fourth quarter and 2.4 percent in all of 2011 compared with 2010.

The median sales price in the city fell to $289,000 in 2011 from $300,000, a decline of 3.3 percent. In the city and county combined, the median price dropped to $349,000 from $354,000.

Median prices in Santa Fe are now at a seven-year low.

"I am absolutely surprised how many homes I'm seeing on the market for under $200,000," Murphy said.

Contact Bruce Krasnow at brucek@sfnewmexican.com.

HOUSING BY THE NUMBERS

PROPERTIES WITH FORECLOSURE FILINGS

Santa Fe County

2011: 908 (1.40 percent of housing units)

2010: 1,039 (1.62 percent)

2009: 737 (1.19 percent)

2008: 261 (0.42 percent)

OTHER FORECLOSURES

New Mexico

2011: 8,797 (1 percent)

United States

2011: 1.8 million (1.45 percent)

SOURCE: REALTYTRAC

ON THE MARKET

Inventory of homes for sale, 4th quarter, Santa Fe County

2009: 2,060

2010: 1,844

2011: 1,442 (down 30 percent from 2009)

SOURCE: SANTA FE ASSOCIATION OF REALTORS