2010 July :: The Construction Management Pro

7-2 Pending Home Sales Drop as Expected

July 2, 2010

WASHINGTON — July 1, 2010 – Following a surge driven by the home buyer tax credit, pending home sales fell with the expiration of the deadline for qualified buyers to sign a purchase contract, according to the National Association of Realtors.

The Pending Home Sales Index, a forward-looking indicator, dropped 30.0 percent to 77.6 based on contracts signed in May from a reading of 110.9 in April, and is 15.9 percent below May 2009 when it was 92.3. The falloff comes on the heels of three strong monthly gains as home buyers rushed to take advantage of the tax credit.

The data reflects contracts and not closings, which normally occur with a lag time of one or two months. However, many closings have been delayed recently from a rush of buyers into the system and slow processing of short sales, in addition to the heavy volume and a more thorough loan underwriting process. As many as 180,000 buyers who signed contracts by April 30 may have missed the June 30 closing deadline for the tax credit. However, Congress passed legislation yesterday to extend the deadline for delayed contracts and President Obama is expected to sign.

NAR chief economist Lawrence Yun said, “Consumers are rational and they rushed to meet the tax credit eligibility deadline in April. The sharp decline in contract signings in May is a natural result with similar low levels of sales activity anticipated in June,” he said. “Surprisingly, though, some local markets such as Portland, Maine, and Jacksonville, Fla., actually experienced an increase in contract signings from a year ago without the tax credit.

“Existing-home sales that close in June will remain elevated, but we’ll then see a notable decline for July and August.”

Congress also reauthorized the National Flood Insurance Program. Many lenders were hesitant to approve mortgages on homes needing flood insurance without congressional action and numerous sales have been on hold. The action is retroactive to a temporary authorization that expired May 31, and also is expected to be signed by the president.

Yun noted the tax credit has broadly stabilized home prices. “Without the tax credit, there will be more aggressive price negotiations between buyers and sellers. The key test on whether the housing market can stand on its own without stimulus medicine will depend critically on private sector job creation in the second half of the year. We’ll also keep a close eye on market conditions on the Gulf Coast.”

Through May of this year 495,000 net private sector jobs have been created; NAR’s forecast for employment growth is about 1 million additional net new jobs over the balance of the year and another 2 million in 2011.

“If jobs come back as expected, the pace of home sales should pick up later this year and reach a sustainable level of activity given very favorable affordability conditions,” Yun said.

“In most areas of the country there will be no sharp snap back in home prices in the upcoming years, although some local markets have experienced double-digit gains this year,” Yun said. NAR forecasts the national median home price to rise only 4 percent cumulatively over the next two years.

“One factor that could lead to price acceleration in upcoming years for some markets is if the very low levels of new home construction were to persist for another year or two,” he added.

The PHSI in the Northeast fell 31.6 percent to 67.0 in May and is 14.8 percent lower than May 2009. In the Midwest the index dropped 32.1 percent to 70.8 and is 20.2 percent below a year ago. Pending home sales in the South fell 33.3 percent to an index of 82.5, and are 14.4 percent lower than May 2009. In the West the index declined 20.9 percent to 85.3 and is 15.1 percent below a year ago.

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Careers In Construction Management

July 1, 2010

What Is Construction Management?

Traditionally, construction involves the three-party, two-relationship model. The first is the owner designer relationship, in which the project owner appoints the designer who is usually an architect or an engineer, to plan and design the project. The second commences after the design is ready and is known as the owner contractor relationship. Here, the contractor is given the project to realize, based on his quotation of cost. Lately however, this model has undergone a radical change. The recent trend is to rely on construction management.

Construction managers divide all the construction activities into stages, budgeting time to meet construction deadlines. They evaluate the most cost-effective schedules for completion and are responsible for ensuring that all the work is completed on time.

Training And Education

Construction Management is also the study of construction, with regard to the managerial and technological aspects like construction management, construction science and construction risk. The most common and widely recognized format for construction management education is a baccalaureate or graduate degree. Other education may relate to on-the-job training and apprenticeship and higher education.

High school students who want to opt for a career in construction management, should study Mathematics, Chemistry, Physics and Accounting. Many colleges and universities offer master’s degrees in construction management and construction science. Someone who has a bachelor’s degree in an unrelated field can also get a master’s degree in construction management. A student can obtain a master’s degree in finance or business administration, to improve career prospects. There are also industry associated sponsored training programs and two year dedicated programs.

Job Prospects

Excellent construction management employment opportunities are available, since the construction boom requires a number of qualified individuals. Also, the increasing complexity of construction projects is creating extra demand for these managers. New technology and laws, setting standards for materials, safety and environmental issues have complicated the construction process. This has raised the demand for trained managers in turn. Opportunities for advancement may vary, depending on the person’s performance and the size and type of the company. The person may also become an independent consultant, an expert witness, a dispute arbitrator or start their own construction management firm.

Conclusion

Construction managers must be flexible and effective. They must be good decision takers and possess the ability to well under pressure or with unexpected delays. A flair for simultaneous activity coordination, analysis and problem solving is necessary. Good communication skills and knowledge of the Spanish language are important. Construction managers have to be available “on call” at all times, to deal with onsite emergencies. Be prepared to work much more than a 40-hour week to meet established construction deadlines. The work is not dangerous, but construction managers must be cautious when on the construction site.

If you are an outdoor person, and are good with math and organization, then the field of construction management can be very satisfying and lucrative career choice.

Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution’s Six Sigma Online offers online six sigma training and certification classes for lean six sigma, black belts, green belts, and yellow belts.

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