Over the past 6 months, the public has been inundated with sensationalist information in the media that has contributed to our current housing slowdown. Just like in the run-up in housing prices through the 2000s, the media has been a large contributor to a market psychology that is decoupled from market fundamentals. The difference being that the story is now negative.

 

 

 

 

This kind of information is important for buyers and sellers to know and also helpful for realtors to use. Gone are the days when a realtor could put up a sign and sell it $20,000 over list price in 12 hours. Back then, product was king and realtors spent most of their time trying to convince sellers to list with them. Now, with more product available and time-on-market figures increasing, the market is more balanced.

 

That said, a drop in sales has no bearing on price. Remember, these are UNIT SALE figures, not price figures. As an example, in December, the number of home sales dropped off in Kelowna; however, the average home sale price increased.

 

 

This is the most damaging type of media reports that come out. Yes, it is technically true that Average Canadian Home Prices in 2009 will likely show an 11% drop from the Average Price in 2008; however, it does not take into account the fact that the market already turned in the middle of 2008, with the average price falling drastically since then. Also, the number of units sold in a given period has a huge effect on how averages are calculated.

 

2008 Jan - June > 100 Units Sell at $200,000 Average
2008 July - Dec > 50 Units Sell at $170,000 Average

What is the Average for 2008? $190,000

 

Of course, at the beginning of the year in January 2009, prices are ALREADY at the December 2008 figure of $170,000, or 11% BELOW the 2008 Average of $190,000. In this example, the slowdown began in the middle of 2008.

 

So even though the average price in 2009 is expected to be 11% below the average price in 2008, the January price already reflects this difference and a further drop in prices is not expected. Using these predictive models, we can see how average prices over the year can really skew the figures.

Knob and tube wiring is usually found in homes built about 50 years ago that have not had the wiring updated. Knob and tube wiring gets its name from the insulator knobs used to keep the wires isolated from objects and the ceramic tubes used to line holes through wooden floor joists. You may find it with older 60 amp services.

Although the actual wire used may be no different from that used today for the most part, it consists of only a hot (black) and neutral (white) wire with no ground wire. Both wires must run separately to fixtures as opposed to those used now which are contained within one plastic sheathing.

Knob and tube wiring can be safe and functional. Hire a qualified electrician to inspect the wiring to determine its safety. With proper documentation from a certified electrician many insurance companies will readily insure your home. While I have safely owned many homes with knob and tube, there are some issues to be concerned about, such as, the fact that there is no ground wire, which may be an issue for today’s lifestyle, high electricity usage and technology. Also, there are potential fire hazards with the break down of the insulation around the knob and tube wiring that comes with age, and should the black and white wires make contact.

In recent years some home insurance companies have begun to refuse to insure homes with knob and tube wiring, however, there are companies that continue to offer regular priced policies for homes with knob and tube, and others who ask a premium for this insurance. If you have any qualms about the safety of your knob and tube wiring, you can hire an electrician to update your home wiring. Be sure to get a quote, and expect to pay more to update a two- or three-story home, than you would for a bungalow. Keep the receipt to show prospective buyers when it comes time to sell.

If you intend to purchase a home in an area where knob and tube wiring was used then ask your realtor for advice on securing insurance and peace of mind. Your realtor may recommend the use of a condition in your offer to purchase that allows you the buyer to satisfy yourself that the house is insurable. That way you won’t be stuck struggling to find insurance right before closing.

 

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Based on about 100 home electrical safety surveys that I have conducted done over the past 6 months, I have found only one home with dangerous knob and tube cabling. In this house the hazardous knob-and-tube wiring was a direct result of over fusing which resulted in over-loading of the conductors followed by insulation breakdown. With this home I rated the home high risk and presented that the home be rewired. The homeowner has done so.

 

A second danger relating to knob and tube wiring is the implementation of "Handyman add-ons". These add-ons are often found, though not exclusively, tapped into existing knob and tube circuits. Handyman add-ons can be very dangerous, consisting of, for example undersized wire, open splices, poor connections and/or dangerous placement or type of device to which it is powering. My findings show that dangerous "Handyman add-ons" are not limited to homes with knob and tube wiring, but related to the age of the house. Regarding homes with serious electrical hazards, I have found a particularly high incidence in homes with secondary suites, a result of the homeowners doing the wiring themselves or by unlicensed electricians.

 

Interestingly, in all homes examined, I have conducted "voltage drop test under loading", an excellent test to determine the conductivity of the conductors, thus a presentation of electrical heat dissipated in the conductors and connections enroute. Any poor connections clearly show up whether the cabling be knob-and-tube, aluminum, or modern wiring. Poor electrical connections can lead to arcing followed by fire. My findings show that if there has not been "handyman tampering" the conductivity of knob-and tube circuits has been by-in-large superior to that modern cabling (1). This is likely due to the soldered connections and the shorter wire runs of knob and tube wiring.

 

A final mention: Of significant concern is dangers of service supply conductors (home powerline). The two very dangerous concerns that have found have been (a) broken "Emily knob" (in 3% of homes) and (b) trees applying pressure to service-supply conductors (in 26% of homes), causing tension on the conductors which could lead to a broken Emily knob. Once the Emily knob has detached from the house, the service supply conductors are at high risk of becoming detached at a point close to the side of the house. This can, and has led to fire outbreak.

 

 

 

 

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