When evaluating a home you are considering buying, it is easy to get caught up in the visual aspects of the home. Water pipes are just one unseen area you remember to inspect.

Water Pipes – Drip, Drip, Drip

Alright, I’ll admit right away water pipes are not exactly the most glamorous aspect of a home. In fact, water piping in most homes is more than adequate to keep you in hot showers while you live there and take care of all your water needs. If there is a problem with the interior water pipes, however, you are in for a very costly and disruptive experience.

The main issue with water pipes on the interior of a home is their location. It is easy to forget about them because they are primarily hidden behind the walls of the house. While this is good from a visual perspective, it quickly becomes a negative if a pipe starts leaking or, god forbid, actually bursts inside a wall. Leaks lead to rot and mold problems that can effect the health of you family. A burst pipe leads to flooding, new carpets, rebuilt walls and large bills.

When evaluating the water pipes in a home, keep in mind the following issues.

1. Copper – The best piping material for water pipes is copper. It will last forever and is resistant to hard deposit build ups which can impact the amount of water flowing through the pipes. Copper pipes are also the sign of a quality construction effort as they tend to be more expensive than alternatives.

2. PVC – If you see PVC water pipes anywhere other than on the sprinkler system or from the main street line to the house, red flags should wave before your eyes. The presence of PVC piping is an indication of an owner doing the piping themselves, as most construction companies will not use PVC. In a majority of locations, such use of PVC is outright illegal. Do not buy a home with PVC piping in the walls! Ever!

3. Iron Piping – For a long time, iron piping was pretty much the standard in home construction. There is nothing particularly wrong with using such piping with one exception. Iron piping is susceptible to water and will rust over time. If you find this gray, metal piping in the home, find out when it was put in and check for rust. Iron piping should last roughly 30 years without any major problems. If replacements must be made, go with copper.

The pipes moving water around the interior of a home may seem uninteresting. Your attitude, however, will change if one of them bursts in the middle of the night.

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The construction industry took a beating due to the financial crisis. Just how bad did home building decline? It depends where you look but overall, the numbers are very frightening.

In a report released recently, new order for homes built in the third quarter of 2008 was down 25% compared to last year. In numbers, that is 2,002 homes for this year compared to 2,660 homes in 2007.

Because of what is happening in the economy, there was increase in the number of cancellations from 24% last year to 27% this year. While real estate companies tried to curb the trend by offering it to other potential buyers, the market wasn’t biting which is why there were a lot of homes that were never sold.

In terms of home building revenues, that roughly translates to $928 million. If you think that is still good, look back at the sales performance last year and you will see that it was lower by 27%. These figures go on and on and they are really depressing.

So are companies making money? No and the worse part is that construction companies have to layoff hundreds or even thousands of workers in order to stay afloat.

If you wanted to build a home, the only way you can do that is if you have extra money flowing around right now because most banks will not able to loan that amount to you right now.

At this rate, the construction industry will only be able to produce 817,000 new homes this year compared to 1.98 million units in 2006. That is a lot and it is note expected to improve any time soon.

But are these numbers surprising? The answer is also no because it is the right reaction especially when the country is in a financial crisis.

Analysts believe this will change in the next 2 to 3 years because within this time frame, homes that were unoccupied will now have people living in them and only then will home building be once again on the upward trend.

What everyone is hoping for right now is a miracle because we are not yet out of the woods when we talk about the current financial crisis. Yes, a $700 billion bailout plan was approved and signed into law but just like Bernanke said, no one expects the recession to end overnight. It is going to take time.

Is the home building decline also happening elsewhere? In the case of Canada, the answer is no. In fact, the opposite is happening. If you were to compare the number of houses built for the month ending September this year versus last year, 6,000 more homes were built in 2008 compared to 2007.

There are many reasons for this such like more people want to settle down so they move away from the rest of their family and most importantly the program they have in place happens to be much better across the border compared to what is available in the US.

But back to reality, no one can deny that over here, there is a sharp decline in home building. The only thing anyone can do is hope for the best in the months and years ahead so we can maybe forget that this ever happened.

Workers are laid off while some construction companies go bankrupt are two things that happen when there is a decline in home building. But if you think that they are the only ones affected, think again because it creates a domino effect.

Aside from those working in the construction company, those who supply the construction materials like the lumber yards and steel mills are also affected because they will not be able to sell that much compared to the last month or even last year which is why they could pose little or no growth at all when it is time to report their corporate earnings.

On a national level, there has been an increase in the number of people who are unemployed which happens to be its highest in 7 years. Just last month, 159,000 people lost their jobs and 22% of them came from the construction industry.

Naturally, such massive job losses will affect consumer spending since people will tighten their belts even further rather than buying something they like from the store.

If a house is going to be built, the homeowner is required to get a permit. This will give him the right to build on the property and is also used by the government an indicator of future building activity. If there is a decline, cities that issue these permits will also lose a certain amount of revenue thus they will not earn that much from construction as they have done so in the past for projects that they plan.

Just to show you how bleak it is, overall permits for the month of September this year in the Midwest, South and West declined by 9.8 percent, 9.9 percent and 12.7 percent, respectively.

The only one who did well was the Northeast after a recent code change in New York City but that just offset the losses it experienced in the two previous months.

These figures are important because housing does contribute to the GDP or gross domestic product of the country and since there is a slump right now, it is only natural that it has a negative effect on the economy.

But what is surprising is the fact that the decline in home building as well as the sale or resale or homes for the first time contributed to the US recession. Back in 2000 to 2001, this was blamed on the burst of the dot-com bubble or the attacks of 9/11.

Although we recovered from that and experienced growth over the 7 year period, some say that this is normal because the recession is part of the business cycle. The economy expands, slows down and then recovers. Yes people will lose jobs and some businesses will go bankrupt.

Should only the strong survive during these trying times? No because the country has experience a recession countless times and some feel that we didn’t learn our lessons from the past which is why we are here again.

Have we learned from our mistakes? Even if the $700 billion bailout plan works, some say no because it is bound to happen again unless radical changes in the system are done. The same goes for the decline in home building because maybe we should have only made homes equal to the demand but that in reality is hard to accomplish.