FOUNDATIONS NEWSLTR MARCH

CHECK OUT OUR SCHOLARSHIP INFORMATION ON PG 4

2024 JANUARY MEMBERSHIP REPORT

Membership Total: 405

Retention rate: 94.12%

STAFF

Patrick Sexton, Executive Director

Pat@RochesterAreaBuilders.com

Shelly Bahlmann, Publications & Special Events Director

Shelly@RochesterAreaBuilders.com

Golf Outing, Sporting Clays, Home Show, Newsletter, Showcase Magazine, RAB Update, Member Plus App & RAB Events App & Website

Mike Peck, Member & Community Engagement Director

Mike@RochesterAreaBuilders.com

Ambassadors, Awards, Builders, Bags & Brews, Commercial Builders Council, Community Relations, Membership, Program, Remodelers Council, Remodelers Tour & 40 Below

Amber Luhmann, Planroom Director

Amber@RochesterAreaBuilders.com

Builders Exchange Trustees, Education, & Showcase of Homes

BOARD OF DIRECTORS

PRESIDENT

Adam Giannini, Knutson Construction

VICE PRESIDENT

Austin Ryan, Ryan Windows & Siding

SECRETARY

Kelsey Vaszily, Kraus-Anderson Construction

TREASURER

Aaron Thompson, The Design Connection

PAST PRESIDENT

J ason Scrimshaw, Kimley-Horn & Associates, Inc.

DIRECTORS

Jeremy Moe, Boldt Company

Jeremy Keller, Keller Homes

Jarett Jones, Merchants Bank

Vanessa Hines, Widseth

Kaleb Stevens, Weis Builders

Chris Hus, RE/MAX Results

Melissa Barbour, TLS Companies, LLC

Joe West, Valor Mechanical

Julie Herrera-Lemler, Rochester Area Economic Development, Inc. (RAEDI) / SBDC

BUILDERS EXCHANGE COUNCIL CHAIR

Niki Birkholz, Palmer Soderberg, Inc.

COMMERCIAL BUILDERS COUNCIL CHAIR

Keith Kranz, LVC Companies

DEVELOPMENT COUNCIL CHAIR

Mark Welch, KMain Street Properties

REMODELERS COUNCIL CHAIR

Jen Foerraro, Hamernicks Flooring

40 BELOW CHAIR

Dylan Musgherd, ISG

NATIONAL LIFE DIRECTORS

Steve Buss, Cornerstone Builders & Real Estate, Inc.

NATIONAL DIRECTORS

Dana Hlebichuk, Widseth

Levi Kaiser, Benike Construction (Rep)

Todd Severson, TLS Companies, LLC

STATE DIRECTORS

Mike Allen, Mike Allen Homes, LLC

Jay Burke, Heartwood Homes

Jean DeWitz, DeWitz Home Builders, Inc.

Kathy Einck, Maplewood Homes, LLC (Rep)

John McGuine, JM Consulting

John Eckerman, RSP Architects

Kenneth Bush, Bush Companies

MISSION STATEMENT

The Rochester Area Builders, Inc, chartered in 1953, is a professional organization of commercial & residential builders, remodelers, developers and associated businesses dedicated to advancing the building industry in Southeast Minnesota.

We are the trusted voice of the industry, providing leadership, education, networking, and information resources to our members, community and government officials.

OPPORTUNITY SCHOLARSHIP

GRADUATING HIGH SCHOOL STUDENTS

POST-SECONDARY SCHOLARSHIPS

Rochester Area Builders, Inc. is proud to announce their 2024 scholarship program. Either $1000 or $500 non-renewable scholarships are available for graduating high school seniors and college freshmen. Scholarships are made available through the Commercial Builders Council, the Builders Exchange of Rochester, and the Youth Sporting Clay Shoot. Scholarships are for attendance in a post-secondary program in a construction-related field including technical school, trade school, apprenticeship, or college. Scholarship recipients will be announced in June 2024. To be eligible for any scholarships, applications must be postmarked by May 8, 2024.

Go to https://www.rochesterareabuilders. com/for-consumers/student-resources/ for Scholarship application.

CRITERIA:

1. Applicant must be a resident of Dodge, Fillmore, Goodhue, Houston, Mower, Olmsted, Steele, Wabasha, Winona counties; be recommended by a RAB or BER member; or participated in the RAB Youth Sporting Clay Shoot.

2. Applicant must be accepted by a post-secondary program in a construction related field including technical school, trade school, apprenticeship, or college.

3. Applicant must have a 2.5 or better G.P.A. – High School Transcript Required

4. Applicant must demonstrate financial need.

5. Scholarship will be paid directly to the school.

Rochester Area Builders

108 Elton Hills LN NW Rochester, MN 55901

507-282-7698

Rab@rochesterareabuilders.com

March 2024

FEBRUARY

Rochester Area Builders

2024 Calendar of Events

27 Networking Night @ Modern Design Cabinetry

27-29 International Builders Show @ Las Vegas, NV

MARCH

5 BAM Building Industry Day at the Capitol

26 Networking Night @ The Pinske Edge

APRIL

20-21 Spring Showcase of Homes

27-28 Spring Showcase of Homes

30 Networking Night @ Hamernick’s Flooring Solutions

MAY

27 Office Closed – Memorial Day

JUNE

6 RAB Golf Outing @ Willow Creek Golf Course

25 Networking Night @ Top Shop

JULY

4 Office Closed for Independence Day

TBD NAHB Mid-Year Board Meeting – TBD

30 Member Appreciation Night @ TBD

AUGUST

TBD Builders, Bags & Brews @ LTS Brewing Co.

27 Networking Night @ Carpet One

SEPTEMBER

2 Office Closed – Labor Day

19 Sporting Clay Shoot

21 Sporting Clay Youth Shoot

21-22 Remodelers Tour & Fall Showcase of Homes

24 General Membership Meeting @ TBD

28-29 Fall Showcase of Homes

OCTOBER

29 Networking Night @ Reagan Outdoors

NOVEMBER

28-29 Office Closed – Thanksgiving Holiday

TBD Past Presidents Dinner

DECEMBER

6 Holiday Party @ TBD

24-25 Office Closed – Christmas Holiday

JUNE 6TH

WILLOW CREEK GOLF COURSE REGISTRATION OPENS APRIL 25TH

WELCOME NEW MEMBERS

FEBRUARY 2024

Sotheby’s International Realty

Michelle Kalina Realtor

507.269.6439 michellekalina.com

Mayo Clinic

Douglas Holtan Health & Wellness

507.284.6540

S & K Custom Furniture

Scott Koeth Furniture Mfg

507.421.6607 scottkoeth.com

COMMITTEES & COUNCILS

Habitat

Brittany Hennessy Non-Profit

With over 10 committees and 5 councils, there is no shortage of opportunities to get involved with the Association. From planning events, to awarding students scholarships, to participating in community projects, there are many options to choose from. As is often said, “You get out what you put into the Association”.

40 BELOW COUNCIL

This is an active, connected and engaged group of young professionals in the building industry. Through community involvement, professional development and networking events, this group is creating a welcoming atmosphere to cultivate long-term connections both professionally and personally.

COMMERCIAL BUILDERS COUNCIL

The members of this Council are interested in all aspects of commercial and industrial construction. They support one another and provide information to the community.

REMODELERS COUNCIL

The goals of this Council are to provide education for themselves in various areas of remodeling and to promote their expertise to the consumer.

DEVELOPMENT COUNCIL

The members of this Council are interested in the areas of industrial, commercial and residential development. They support one another and provide information to the community.

BUILDERS EXCHANGE COUNCIL

This Council provides access to commercial projects currently out for bid in our area. Members can view plans and specs in our office and also online at their office if they subscribe to the Plans Online Service. Members also receive the Weekly Bulletin and access to the website, giving them information on posted projects.

• Car Show • Community Relations • Education • Fashion Show • Golf Outing • Government Affairs • Home Show • Membership & Retention • Program • Remodelers Tour • Showcase • Sporting Clay Shoot COMMITTEE INVOLVEMENT OPPORTUNITIES

Notice of Funding Availability from Coalition for Rochester Area Housing

The Coalition for Rochester Area Housing is awarding gap funding for applicants of the Minnesota Housing competitive 2024 Multifamily Consolidated RFP/2025 Housing Tax Credit to assist builders/developers to secure funding for affordable rental housing creation projects in the Greater Rochester Area.

Eligibility

Projects must be located within a 35-mile radius of the City of Rochester and meet one of the housing type categories as defined by Minnesota Housing Finance Agency: permanent general occupancy rental housing (workforce housing), senior housing, or permanent supportive housing (supportive housing).

- Application and Certification forms will be posted on Friday, April 12, 2024 to the Coalition’s webpage.

- Proposals must be submitted no later than 5 pm CST on Friday, May 10, 2024.

- Please direct any inquiries regarding proposals to JoMarie Morris at jomarie@rochesterarea.org.

· FOOTINGS

FOUNDATION WALLS

· FLOOR SLABS

EXTERIOR SITE CONCRETE

BAM Annual Day at the Capitol

The Minnesota Legislature started meeting on February 12. Like last year, they have a very aggressive agenda. If you would like to participate in this year’s Builder’s Day at the Capitol, please email Pat Sexton Pat@RochesterAreaBuilders.com.

We will be meeting at the Radisson Hotel St. Paul (formerly the Kelly Inn). The agenda for the day is:

9:00 - 9:30 Coffee

9:30 - 10:00 Legislative Leaders

10:00 - 10:25 Agency Commissioner

10:30 - 11:00 Industry Expert

11:00 - 11:30 Session Update

11:30 - 12:00 Lunch

12:00 - 3:30 Regional meetings with Legislative Leaders

INFLATION REMAINS STICKY DUE TO PERSISTENT HOUSING COSTS

BY FAN-YU KUO on FEBRUARY 13, 2024

Consumer prices picked up again in January while core prices remained elevated, especially housing costs. Despite a slowdown in the year-over-year increase, shelter costs continue to put upward pressure on inflation, accounting for over two-thirds of the total increase in all items excluding food and energy. This hotter-thanexpected report will almost certainly delay Fed rate cuts until the second half of the year.

The Fed’s ability to address rising housing costs is limited because increases are driven by a lack of affordable supply and increasing development costs. Additional housing supply is the primary solution to tame housing inflation. The Fed’s tools for promoting housing supply are constrained.

In fact, further tightening of monetary policy would hurt housing supply because it would increase the cost of AD&C financing. This can be seen on the graph below, as shelter costs continue to rise despite Fed policy tightening. Nonetheless, the NAHB forecast expects to see shelter costs decline further in the coming months. This is supported by real-time data from private data providers that indicate a cooling in rent growth.

With respect to the aggregate data, the Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.3% in January on a seasonally adjusted basis, after rising 0.2% in December. The price index for a broad set of energy sources fell by 0.9% in January as the decline in gasoline index (-3.3%) and fuel oil index (-4.5%) more than offset the increase in the natural gas index (+2.0%) and electricity index (+1.2%). Meanwhile, the food index and the food at home index both increased by 0.4% in January. Excluding the volatile food and energy components, the “core” CPI rose by 0.4% in January, after rising 0.3% in December.

In January, the index for shelter (+0.6%) continued to be the largest contributor to the monthly increase in the core CPI. Among other top contributors that rose in January include indexes for motor vehicle insurance (+1.4%) and medical care (+0.5%). Meanwhile, the top contributors that experienced a decline in January include indexes for used cars and trucks (-3.4%) and apparel (-0.7%).

The index for shelter makes up more than 40% of the “core” CPI. The index saw a 0.6% rise in January, following an increase of 0.4% in December. The indexes for owners’ equivalent rent (OER) increased by 0.6% and rent of primary residence (RPR) increased by 0.4% over the month. These gains have been the largest contributors to headline inflation in recent months.

During the past twelve months, on a non-seasonally adjusted basis, the CPI rose by 3.1% in January, following a 3.4% increase in December. The “core” CPI increased by 3.9% over the past twelve months, the same increase for the 12-months ending December. This was the slowest annual gain since May 2021. Over the past twelve months, the food index rose by 2.7% while the energy index fell by 2.0%.

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster than overall inflation, the real rent index rises and vice versa. The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components). The Real Rent Index was unchanged in January.

J O I N U S A S W E C E L E B R A T E !

Monday:

1 1 : 3 0 a m - 1 2 : 3 0 p m | 1 2 5 L i v e C e d a r R o o m s

P r o c l a m a t i o n R e a d i n g w i t h M a y o r N o r t o n & L u n c h

4 : 3 0 - 5 : 3 0 p m | K T T C M i d w e s t A c c e s s L i v e I n t e r v i e w

Tuesday:

C o o k i n g i t U p a t t h e H o p e L o d g e

C o o k a t 3 : 0 0 p m | S e r v e a t 5 : 0 0 p m

Wednesday:

1 1 : 3 0 a m - 1 : 0 0 p m | P u r p l e G o a t

S p e a k e r D a w n B e c k “ D r a m a i n t h e W o r k p l a c e ”

Thursday:

J o b S i t e T o u r f o l l o w e d b y H a p p y H o u r

I n t e r e s t e d i n j o i n i n g t h e c e l e b r a t i o n ?

E m a i l i n f o @ n a w i c s e m n . o r g

F o l l o w u s f o r m o r e i n f o r m a t i o n o n W I C W e e k a n d o u r

o t h e r c h a p t e r e v e n t s !

DBS Group Welcomes Three New Team Members to Enhance Operations and Project Delivery

Design-build commercial contractor DBS Group has hired three new team members to increase the company's project management, estimation, and administrative capacity to meet continued growing demand for the company’s services. Kevin Larson joins as a project manager, Bryan Grefsheim comes on board as a project estimator, and Sharon Licht steps in as an administrative assistant.

Larson brings a wealth of experience in the commercial construction sector, where he spent several years estimating and managing large projects throughout the Upper Midwest. Larson will operate from the company's Rochester, Minnesota, office, bringing his dedicated and client-focused approach to the team.

Grefsheim is a construction industry veteran, having owned and operated a building restoration company for nearly two decades. Following the venture, Grefsheim worked with two regional commercial construction firms, providing estimating services on various projects such as hotels, resort attractions, restaurants, and athletic facilities. His comprehensive experience and knowledge in project estimation and construction management make him a key addition to the DBS team. Grefsheim works from the Onalaska, Wis consin, office.

Licht joins DBS Group with a solid foundation in business administration, backed by a bachelor's degree from the University of Wisconsin – Eau Claire. With her experience in administration and marketing for a regional media company and a local real estate broker, Licht steps in with a unique set of skills to support DBS Group's administrative functions. She is based in the Onalaska office.

"We're excited to welcome Kevin, Bryan, and Sharon to the DBS Group family. Each of them brings valuable skills and experiences that will contribute to our mission of delivering exceptional construction services," said DBS Group President/CEO Chris Walters . "Their addition is a testament to our commitment to excellence and our continuous effort to meet and exceed our clients' expectations. We look forward to the fresh perspectives and innovative approaches they bring to our team."

DBS Group is a design-build construction manager and general contractor based in Onalaska, Wisconsin, and Rochester, Minnesota. Experts in design-build project delivery in various commercial construction markets, DBS Group manages building projects from co nception to completion. The company's in-house designers, and external design partners, collaborate with DBS Group's estimating and construction experts to deliver projects on time and on budget.

THE AGE OF THE U.S. HOUSING STOCK

BY NA ZHAO on FEBRUARY 12, 2024

The median age of owner-occupied homes is 40 years old, according to the latest data from the 2022 American Community Survey[1]. The U.S. owner-occupied housing stock is aging rapidly especially after the Great Recession, as the residential construction continues to fall behind in the number of new homes built. New home construction faces headwinds such as rising material costs, labor shortage, and elevated interest rates nowadays.

With a lack of sufficient supply of new construction, the aging housing stock signals a growing remodeling market, as old structures need to add new amenities or repair/replace old components. Rising home prices also encourage homeowners to spend more on home improvement. Over the long run, the aging of the housing stock implies that remodeling may grow faster than new construction.

New construction added nearly 1.7 million units to the national stock from 2020 to 2022, accounting for only 2% of owner-occupied housing stock in 2022. Relatively newer owner-occupied homes built between 2010 and 2019 took up around 9%. Owner-occupied homes constructed between 2000 and 2009 make up 15% of the housing stock. The majority, or around 60%, of the owneroccupied homes were built before 1980, with around 35% built before 1970.

Due to modest supply of housing construction, the share of new construction built within the past 12 years declined greatly, from 17% in 2012 to only 11% in 2022. Meanwhile, the share of housing stock that is at least 53 years old experienced a significant increase over the 10 years ago. The share in 2022 was 35% compared to 29% in 2012.

[1] : Census Bureau did not release the standard 2020 1-year American Community Survey (ACS) due to the data collection disruptions experienced during the COVID-19 pandemic. The data quality issues for some topics remain in the experimental estimates of the 2020 data. To be cautious, the 2020 experimental data is not included in the analysis.

FOUNDATIONS NEWSLETTER ADVERTISING

Rochester Area Builders Newsletter is an unbeatable opportunity to advertise to members and individuals associated with RAB. It is a source of valuable association and industry information, and is published and emailed monthly. Foundations is sent to over 1600 connected industry professionals. Ad sizes are listed under Display Ad Dimensions, and prices are located above. Ads may be changed from month to month. Our prices are for full color ads. We will gladly work with you to design your ad. Please send digital files for all ad copy, logos, and artwork. We use PC format. We accept Illustrator and Photoshop files. Convert all fonts to outlines. We also accept the following high resolution file types: .tif, .eps and .pdf (with all graphics and fonts embedded). If you have any other formats please contact us.

RETURN TO:

ROCHESTER AREA BUILDERS

Shelly Bahlmann

Shelly@RochesterAreaBuilders.com

108 Elton Hills Ln NW

Rochester, MN 55901

507-282-7698

Newsletter Display Ad Dimensions

1/2 Horizontal 8-1/2 x 5-1/2

Send artwork to Shelly@RochesterAreaBuilders.com by the 15th of the month to be included in the upcoming Foundation Newsletter.

Presented By:

Sponsored By:

April 20 - 21 & April 27 - 28, 2024

YEAR TO DATE STATISTICS

HOUSING AFFORDABILITY REMAINS NEAR HISTORIC LOW LEVEL

BY ROSE QUINT on FEBRUARY 8, 2024

Mortgage rates that hit more than a 20-year high, coupled with elevated construction costs and excessive regulatory costs, left housing affordability in the fourth quarter of 2023 virtually unchanged from the previous quarter and holding near its lowest level in more than a decade.

According to the National Association of Home Builders (NAHB)/Wells Fargo Housing Opportunity Index (HOI), just 37.7% of new and existing homes sold between the beginning of October and end of December were affordable to families earning the U.S. median income of $96,300. This is nearly identical to the 37.4% posted in the third quarter of last year, which was the lowest reading since NAHB began tracking affordability on a consistent basis in 2012.

The fourth quarter also marks the final report of the long-running HOI series. Replacing the HOI in the first quarter of this year will be a new housing affordability index from NAHB called the Cost of Housing Index (CHI), a quarterly analysis of housing costs in the U.S. and metropolitan areas. The CHI represents the share of a typical family’s income needed to make a mortgage payment. A low-income CHI will also be produced for families earning only 33% of the area’s median income.

The HOI shows that the national median home price was $375,000 in the fourth quarter, down from $388,000 in the third quarter. Meanwhile, average mortgage rates increased more than 30 basis points from 7.13% in the third quarter up to 7.44% in the fourth quarter—the highest rate in the HOI series history.

The top five most affordable major housing markets in the fourth quarter of 2023 were:

1. Lansing-East Lansing, Mich.

2. Harrisburg-Carlisle, Pa.

3. Indianapolis-Carmel-Anderson, Ind.

4. Dayton-Kettering, Ohio

5. Akron, Ohio

Top five least affordable major housing markets—all located in California:

1. Los Angeles-Long Beach-Glendale

2. Anaheim-Santa Ana-Irvine

3. San Diego-Chula Vista-Carlsbad

4. Oxnard-Thousand Oaks-Ventura

5. San Francisco-San Mateo-Redwood City

Meanwhile, Bay City, Mich., was rated the nation’s most affordable small market, with 88.3% of homes sold in the fourth quarter being affordable to families earning the median income of $82,300.

The top five least affordable small housing markets were also in the Golden State. At the very bottom of the affordability chart was Santa Maria-Santa Barbara, Calif., where 5.2% of all new and existing homes sold in the fourth quarter were affordable to families earning the area median income of $107,300.

Visit nahb.org/hoi for tables, historic data and details.

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Reach Qualified Customers

Advertise on the RAB Website!

More than 3,000 people visit the RAB website each month, many of them looking for a contractor. Advertise on our site and reach them when they’re primed to buy! Banner ads are available in a variety of locations on the RAB site, from job posts to the contractor directory. Higher tiers come with priority placement in directory search results too.

Contact us today to learn how you can start advertising!

Contact Rochester Area Builders

Shelly@RochesterAreaBuilders.com or 507-282-7698

WEBSITE PROFILE ENHANCEMENTS

Company Name, Address and Phone Number

Links to Website, Address, and Phone

5 Categories

Medium Placement in Search Results

Link to Profile Page

12 Categories

Company Description (200 Characters)

Keywords (240 Characters)

Hours of Operation

Driving Directions

Higher Placement in Search Results

Company Description (1600 Characters)

Keywords (Unlimited Characters)

200 Characters on Search Results

Bulleted List with Hyperlinks

Logo on Profile Page Can Be Added

Search Results Summary (200 Characters)

Profile Page Header Can Be Added

Gold Map Pin

Logo On Search Results Can Be Added

Social Networks Can Be Added

Photo Gallery Can Be Added

YouTube Video Can Be Added

Contact:

Shelly@rochesterareabuilders.com for more information.