Archive for July, 2010

Do You Need a Home Inspection or an Engineering Analysis?

By James Dobney, James Dobney Inspections

What do homebuyers want to know?
If you’re like most homebuyers, you want to know the condition of a house before you buy it. Are the home’s mechanical systems and structural components in working order? Will they need repair or replacement?

Answering these questions is precisely the job of a professional Home Inspector during a complete visual examination of the property. A qualified Home Inspector, through specific training and experience, understands not only how a home’s systems and components should work, but also how they interact with each other, and how they stand the test of time.

Why the Confusion?
It is not uncommon for homebuyers to be confused about who is qualified to perform home inspections. There are, for example, no home inspection degrees offered or required by law. In some cases, consumers have been led to believe that a home inspection involves an engineering analysis and therefore requires the use of a licensed Professional Engineer (P.Eng.). The confusion is compounded by the inadvertent misuse of the terms “engineer” and “engineering inspection.”

Visual home inspections do not involve engineering analysis, however, even when performed by P.Eng.s. In fact, engineering is an entirely different type of investigation, which entails detailed scientific measurements, tests, calculations, and/or analysis. Normally this is done on one specific component of the house (structural or electrical, for example) by, or under the direction of, and engineer trained in that area. Such a technically exhaustive analysis involves considerable time and expense, and is only appropriate on rare occasions when visual evidence exists to indicate design problems which require further, specialized investigation.

Finding a Qualified Home Inspector Who is Right for You
The most reliable and respected indication of Home Inspector qualifications is membership in the Canadian Association of Home & Property Inspectors of BC — CAHPI (BC), a self-regulating association of professional home and property inspectors, representing all regions of British Columbia. They are committed to protecting consumers through their stringent membership requirements, mandatory ongoing training programs, and their detailed Standards of Practice and Code of Ethics. CAHPI (BC) is presently seeking regulatory control of the home inspection industry through the Province of British Columbia, so that consumers can be better assured of inspector qualifications.

A competent and professional home inspector must be a fully trained generalist able to understand how the systems/components found in a home perform and mature over time. These systems include items such as: structural components, exterior components, roofing, plumbing, electrical, heating, air conditioning, interior, insulation and ventilation. The home inspector must be able to effectively report his findings to the customer, and the inspection report must conform to the CAHPI (BC) Standards of Practice.

Clear communication is an important part of the home inspection business. In addition to providing a quality report, the inspector must be able to respond well to enquiries. Good communication and interpersonal skills are definite assets.

Therefore, of you are looking for a qualified expert to perform a visual home inspection to determine the condition of your prospective new home, regardless of any degrees or titles, be sure to use a CAHPI (BC) member.

If you still have further questions about your prospective home and the type of professional you need to inspect it, please contact James Dobney & Associates or CAHPI (BC) — www.cahpi.bc.ca

Mortgage rate forecast

By Cameron Muir, Chief Economist and Brendon Ogmundson, Economist, British Columbia Real Estate Association

The Canadian economy grew at the exceptional pace of 6.1% in the first quarter of 2010, propelled by a booming housing market, strong consumer spending and the rebuilding of private sector inventories. Moreover, growth in the second quarter of 2010, while not expected to register the sizzling pace of the previous six months, should be a robust 3%-4%.

However there are signs that the economy, if not stalling out, may be slowing down. April’s monthly GDP print was disappointingly flat as consumers moved to the sidelines, sending retail sales lower by almost 2%.

Even if Canadian consumers are beginning to tire out, economic growth should be supported in coming months by projects initiated under the federal government’s infrastructure stimulus plan. This stimulus will provide a needed boost to the economy through the remainder of 2010, with projected impacts peaking in the third quarter, but will create a drag on growth in 2011 as the stimulus is withdrawn from government expenditure.

The strength of the Canadian economic recovery over the past six months is evidenced by the over 300,000 jobs created in the Canadian economy since the beginning of the year. While this exceptional rate of job creation stands in stark contrast to the gloomy employment situation of our southern neighbour, it also re-affirms the need for the Bank of Canada to begin withdrawing its emergency level of monetary stimulus by raising interest rates, particularly given the proximity of core inflation to its 2% target rate.

The withdrawal of monetary and fiscal stimulus from the Canadian economy in coming months will result in slower growth in both the second half of 2010 and into 2011. This growth slowdown may be further exacerbated by weaker than currently anticipated US and global economic growth as well as a higher Canadian dollar resulting from a rise in Canadian interest rates relative to the United States.

In all, slower economic growth and inflation that is within the Bank of Canada’s comfort zone should mean that, while interest rates are certain to rise, the pace of interest rate increases should be orderly and the level of interest rates will remain near historic lows through the remainder of the year.

Activity steady to start the summer season

VANCOUVER, B.C. – July 5, 2010. The Greater Vancouver housing market experienced steady activity to begin the summer season.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver totalled 2,972 in June 2010, a decline of 30.2 per cent compared to the 4,259 sales in June 2009, which was the second highest selling June on record.

“Activity in June marked a healthy balance between the near record setting pace of June 2009 and the considerably slower activity witnessed in June 2008, a period of recession as we all know,” Jake Moldowan, REBGV president said.

Compared to June 2008, last month’s sales represent a 22.6 per cent increase over the 2,425 sales recorded that month, but are 30 per cent less than the 4,244 sales in June 2007. June 2010 sales also represent a 5.8 per cent decline compared to the previous month’s sales totals.

“We didn’t experience any record-breaking activity in June, but we did see a stable summer market,” Moldowan said. “The number of new listings coming on the market is not as dramatic as we saw over the previous three months and demand remains at a healthy level for this traditionally quieter time of year.”

New listings for detached, attached and apartment properties totalled 5,544 in June 2010, a 3.2 per cent increase compared to June 2009 when 5,372 new units were listed, and a 21 per cent decline compared to May 2010 when 7,014 properties were added to the MLS®.

At 17,564, the total number of property listings on the MLS® increased 1.2 per cent in June compared to last month, and is up 32 per cent compared to this time last year.

“There has been less upward pressure on prices in our market the last few months, which has allowed prices to ease back from the record high numbers seen in April,” Moldowan said.

Over the last 12 months, the overall MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 11.8 per cent to $580,237 from $518,855 in June 2009.

Sales of detached properties in June 2010 reached 1,139, a decrease of 31.7 per cent from the 1,667 detached sales recorded in June 2009 and a 24.1 per cent increase from the 918 units sold in June 2008. The benchmark price for detached properties increased 13.4 per cent from June 2009 to $795,025.

Sales of apartment properties reached 1,258 in June 2010, a decline of 29.7 per cent compared to the 1,790 sales in June 2009 and an increase of 19 per cent compared to the 1,057 sales in June 2008.The benchmark price of an apartment property increased 9.7 per cent from June 2009 to $391,528.

Attached property sales in June 2010 totalled 575, a decline of 28.3 per cent compared to the 802 sales in June 2009 and a 27.8 per cent increase from the 450 attached properties sold in June 2008. The benchmark price of an attached unit increased 11.6 per cent between June 2009 and 2010 to $492,861.