Real estate prices rose again in August and were approaching their levels of a year ago, numbers released Wednesday by the Greater Vancouver and Fraser Valley real estate boards showed.

Market watchers, surprised by the strength of the rebound, said it appeared buyers were cashing in on record-low mortgage rates while they last.

Sales set records in July and stayed hot in August. The question now is whether the market can keep up the pace.

“Before I would call this a complete recovery I would want to see a couple of months of data,” Robyn Adamache, a market analyst with Canada Mortgage and Housing Corp. said in an interview.

Adamache added that there now are five months worth of data showing an upward trend, but “it remains to be seen whether this was just a one-shot deal where everybody was pre-approved for their [low-rate] mortgages and they basically jumped into the market, and whether or not [the market] can be sustained for the rest of the year.”

However, Adamache said on balance, Metro Vancouver’s average property prices, since their trough last March, have climbed back to within three percentage points of their peak.

She estimated that from peak to trough, average prices fell some 15 per cent.

Record-low mortgage rates, which fell as low as 3.65 per cent on five-year fixed-rate mortgages before rising again after June 1, played a big role in the market.

“If I had to put [market performance] on one thing, I would have to say interest rates,” Carolyn Heaney, Vancouver area manager of mortgage development for the Bank of Montreal, said in an interview.

Heaney said her mortgage lenders had a lot of clients who had been approved for mortgages with the low rates, and had 90 days to buy homes and close their purchases before their pre-approvals expired.

“There were certainly a lot of people who jumped off the fence in order to keep their rates,” she said.

Kevin Lutz, B.C. mortgage manager for RBC Financial Group, said that despite the recession, a bit of consumer confidence has been returning to the market. Lutz said the past few months have seen buyers cram almost a year’s worth of buying activity into a short period.

In the area of Metro Vancouver covered by the Real Estate Board of Greater Vancouver (REBGV), that translated into 3,441 sales through the Multiple Listing service, a 120-per-cent increase from last August, when the region saw 1,568 sales.

Prices in Metro continued to edge up with the benchmark price (the average price of the typical property sold) for detached homes hitting $732,656 in August. That was just 0.7 per cent below last year’s benchmark price for detached homes.

Some communities saw detached-home prices rise above their levels of a year ago. On Vancouver’s west side, for example, the benchmark of $1.4 million in August was three per cent higher than in the same month a year ago.

The $685,746 benchmark for detached homes on Vancouver’s east side was 3.2 per cent higher than a year ago.

New Westminster, Pitt Meadows and the Sunshine Coast also saw detached home prices higher than a year ago.

“It has been surprising,” REBGV president-elect Jake Moldown said. “I don’t think if you had talked to any of us in January that we would be expecting sales levels to be where they are today.”

However, he said with price adjustments and low interest rates combining to reduce mortgage payments, a lot of first-time buyers have jumped into the market, helping set off a chain reaction of upward movement.

In the Fraser Valley, realtors recorded their second busiest August on record, with agents racking up 1,786 sales through the MLS in August, up 96 per cent from 910 sales in the same month a year ago, when the market was sliding rapidly.

For the period of June through August, the board said valley realtors saw 5,857 MLS sales, which outpaced the same period of 2007, but is still far from matching 2005’s 6,866 sales for June, July and August.

Fraser Valley realtors saw the benchmark price (the average price of a typical property sold) for single-family homes creep up 3.8 per cent over the past three months to $483,839 in August, not quite erasing the losses of the past year. That price was still 3.5 per cent below last August’s $501,317 benchmark.