Across the country, meanwhile, markets experienced record sales in July posting their biggest year-over-year increase in two years.

With lower prices and near record-low mortgage rates, buyers across the province rushed to buy up 10,051 homes through the Multiple Listing Service in July, the association said, lifting the month's results 53 per cent over the same month a year ago.

"Record home sales in Metro Vancouver and Victoria propelled the province into balanced conditions last month," association chief economist Cameron Muir said in a news release.

Conditions are not equal everywhere, Muir cautioned. He said interior markets have been hampered by their reliance on struggling resource industries, and interior markets have been interrupted by forest fires.

And while the last six months have seen increasing sales and declining inventories, the 46,380 homes sold through MLS in the first seven months of 2009 is still down six per cent from 2008.

The dollar value of those cumulative sales, at $21 billion, is 10 per cent less than the same period a year ago.

In an interview, Muir attributed the gains to lower mortage interest rates and lower house prices than a year ago, and a feeling among consumers that prices and rates may go up and this is a good time to buy.

"In the fall and winter months we saw demand fall off sharply as a result of the global financial crisis. First time buyers were largely absent from the market," said Muir.

"In the spring leading into the summer, we've seen an increase in sales as a result of households seeing an end of the recession in sight. Mortgage rates went up in late May and June, and that was a tremendous signal for prospective buyers who had locked in with pre-approved mortgages for 60 or 90 days to lock into that option."

Nationally, the Canadian Real Estate Association reported Friday that realtors sold 50,270 units sold via the multiple listing service last month. That's an 18.2 per cent jump from a year ago. It also marked the first time sales had topped 50,000 in July.

"The difference in the resale housing market now, compared to the beginning of the year, is night and day and nowhere is this more evident than in the west," said Dale Ripplinger, president of CREA. "Homebuyers recognize that interest rates and prices have bottomed out, and are taking advantage of excellent affordability before prices and interest rates move higher."

A five-year fixed-rate mortgage, the most popular product among consumers, is still available for under four per cent at some financial institutions. Variable rate mortgages, tied to prime, remain in the three per cent range and are not expected to rise until June. The Bank of Canada has pledged not to change its lending rate until then — but it is not an ironclad guarantee.

The low rates seem to have worked and have the housing market even hotter than it was in 2007, a record year. July sales in 2009 were 3.9 per cent above the previous July high set in 2007.

It has been a stunning reversal for a real estate market that had almost ground to a halt over the winter. MLS sales on a seasonally adjusted basis have risen for six straight months and are up 61.2 per cent off the decade-low set in January. Sales are only off 1.4 per cent from the May, 2007 peak.

The strength in the market is being felt right across the country. Vancouver sales last were up 90 per cent from a year ago to lead the pack. Toronto sales climbed 28 per cent from a year ago and Edmonton sales rose 28 per cent during the same period.

With demand strong in the country's highest-priced markets, it is skewing average price but in the opposite way from what was happening when the market was slumping. The average price of a home sold on MLS last month rose 7.6 per cent from a year ago to $326,832.

Part of the pressure on prices is coming from a dearth of supply. New listings in July were down 13 per cent from a year ago to 73,444. It marked the seventh monthly year-over-year decline in new listings.

The overall supply of homes for sale on the MLS was down to 219,982 at the end of July, a 12.5 per cent decrease from 2008. Based on present activity, there is only 4.4 months of housing inventory in the mark. That's a sharp contrast to the 12.8 months of inventory available in January.

"Home sales through the MLS systems in July provide clear evidence that sentiment about making major purchases continues to improve," said Gregory Klump, chief economist with CREA. "Activity may level out over the rest of the year as home prices and mortgage lending interest rates creep higher. The number of new listings coming onto the market is down from last year and the rebound in sales activity is paring inventories, so the number months of inventory is on the wane. These trends are supporting average prices."

Muir doesn't expect the record buying flurry to contiune into the fall.

"We don't anticipate record levels of sales to continue over the next few months. We might have a strong August, and we expect home sales to stay above the same period last year, but this is unlikely to be sustained for the balance of the year."