JULY 2022
ROCHESTER AREA BUILDERS, INC.
Thank you to everyone who Participated in the 2022 Golf Outing!
BUILDERS, BAGS & BREWS Registration Information
11
FALL SHOWCASE/ REMODELERS TOUR MAGAZINE Advertising Information
KITCHENS FOR KIDS We Need Builders!
13
14
D C
DEVELOPMENT COUNCIL a division of the Rochester Area Builders, Inc.
C OMMERCIAL C B UILDERS
OUNCIL
a division of Rochester Area Builders, Inc.
2 | JULY 2022
STAFF
EXECUTIVE DIRECTOR John Eischen, John@RochesterAreaBuilders.com Shelly Bahlmann, Shelly@RochesterAreaBuilders.com Golf Outing, Sporting Clays, Home Show, Directory, Newsletter, RAB Update, Member Plus App & RAB Events App Rebekah Fierst, Rebekah@RochesterAreaBuilders.com Ambassadors, Awards, Builders, Bags & Brews, Commercial Builders Council, Community Relations, Education, Membership, Fashion Show, Program, Remodelers Council, Executive & Remodelers Tour, 40 Below Elizabeth Sullivan-Burton, Elizabeth@RochesterAreaBuilders.com Builders Exchange Trustees and Showcase Committee, Website GOVERNMENT & PUBLIC AFFAIRS CONSULTANT Rick Dold, Rick@GodwinDold.com
BOARD OF DIRECTORS
PRESIDENT
Becky Holmen, Haley Lighting
VICE PRESIDENT
Jason Scrimshaw, Kimley-Horn & Associates, Inc.
SECRETARY
Jennifer Mitchell, Edina Realty
TREASURER
Jessica Markley, Elias Construction, LLC
PAST PRESIDENT
Luke Stier, Stier Construction, Inc.
DIRECTORS
Adam Giannini, Knutson Construction Adam Kramer, Kramer Contracting Jarett Jones, Merchants Bank Aaron Thompson, The Design Connection Austin Ryan, Ryan Windows & Siding Charlie Sweeney, Kraus-Anderson Construction Melissa Barbour, TLS Companies, LLC Vanessa Hines, Widseth Julie Herrera-Lemler, Rochester Area Economic Development, Inc. (RAEDI)
BUILDERS EXCHANGE COUNCIL CHAIR
Katie Reinhart, Kraus-Anderson Construction
COMMERCIAL BUILDERS COUNCIL CHAIR
Robbie Danko, The Boldt Company
DEVELOPMENT COUNCIL CHAIR
Hal Henderson, HGA Architects & Engineers
REMODELERS COUNCIL CHAIR
Krista Weisz, Stier Construction, Inc.
40 BELOW CHAIR
Adam Giannini, Knutson Construction
NATIONAL LIFE DIRECTORS
Steve Buss, Cornerstone Builders & Real Estate, Inc. (Rep)
NATIONAL DIRECTORS
Dana Hlebichuk, Widseth Levi Kaiser, Benike Construction Todd Severson, TLS Companies, LLC
STATE DIRECTORS
Mike Allen, Mike Allen Homes, LLC Jean DeWitz, DeWitz Home Builders, Inc. Kathy Einck, Maplewood Homes.LLC (Rep) John McGuine, JM Consulting Dan Severson, Dan Severson Builders, Inc., 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.
3 | FOUNDATIONS NEWSLTR
11
9
10 13 RAB CALENDAR........................................... 4
JULY 2022
14
FALL SHOWCASE/REMODELERS TOUR MAGAZINE....................................... 13
2022 CALENDAR.......................................... 5
Advertising Opportunity
MEMBER REPORT........................................ 6
2023 Home Show Activity Registration
LETTER FROM RAB PRESIDENT.................... 8
Federal Reserve Accelerates Rate Hikes
ROCHESTERFEST......................................... 9
Weakening Builder Confidence
2022 SPORTING CLAY SHOOT.................... 10
Rochester & Pine Island
STUDS, STRUTS & STILETTOS.................... 10
April 2022
BUILDERS, BAGS & BREWS........................ 11
April 2022
FALL SHOWCASE....................................... 12
What Do Home Buyers Buy after Moving
RAB Events
Welcome New Members
Becky Holmen, Haley Lighting, 2022 RAB President Thank You!
Save the Date!
Design Entry & Sponsorship Information Event Information Event information
REMODELERS TOUR................................... 12
Event information
KITCHENS FOR KIDS.................................. 14 NAHB EYE ON HOUSING............................. 15 NAHB EYE ON HOUSING............................. 20 BUILDING PERMITS................................... 24 SEMR HISTORICAL OVERVIEW................... 24 OLMSTED BUILDING PERMITS ................... 25 NAHB EYE ON HOUSING........................ 26-27
4 | JULY 2022
Sunday
July 2022
Monday
Tuesday
3
Wednesday
4
5
Thursday
Friday 1
2
7
8
9
14
15
16
21
22
23
28
29
30
6
7:30 AM CBC Meeting
Saturday
12:00 PM Showcase Committee
10
12:00 PM Government Affairs Committee
11 8:30 AM Remodelers Council Exec.
3:30 PM Builders Exchange Board of Trustees
17
12
13
7:30 AM Green Building Committee
12:00 PM Sporting Clays Committee
3:00 PM Board Meeting
18
19
11:30 AM Fashion Show Committee
12:00 PM Ambassadors Committee
20
7:30 AM Membership Committee
4:30 PM 40 Below Exec Committee
24
11:30 AM Home Show Committee
25
4:30 PM Member Appreciation Night
26
3:00 PM Development Services Advisory Committee
27
11:30 AM Community Relations Committee TBD 40 Below @ Rochester Honkers
31
MEETINGS ARE NOW BEING HELD IN PERSON UNLESS NOTIFIED DIFFERENTLY BY JOHN
5 | FOUNDATIONS NEWSLTR
Rochester Area Builders 2022 Calendar of Events
JUNE JULY
28
Networking Night @ Knutson Construction
4 TBD 26
Office Closed for Independence Day NAHB Mid-Year Board Meeting – TBD Member Appreciation Night @ Mayowood Stone Barn
AUGUST 13 30
Builders, Bags & Brews @ LTS Brewing Company Networking Night @ Valor Mechanical & Tulip Tree
SEPTEMBER 5 Office Closed – Labor Day 15 Sporting Clay Shoot 17 Sporting Clay Youth Shoot 17-18 Remodelers Tour 17-18, 24-25 Fall Showcase of Homes 27 General Membership Meeting @ DoubleTree OCTOBER 13 25
Studs, Struts & Stilettos @ Mayo Civic Center Networking Night @ Warners’ Stellian
NOVEMBER TBD 24-25
Past Presidents Dinner Office Closed – Thanksgiving Holiday
DECEMBER 2 23-26
Holiday Party @ The Hilton Office Closed – Christmas Holiday
FUTURE DATES International Builders Show RAB Home Show
January 31 – February 2, 2023 @ Las Vegas, NV February 3-5, 2023 @ Mayo Civic Center
6 | JULY 2022
ROCHESTER AREA BUILDERS, INC.
MEMBERSHIP REPORT JUNE 2022
Membership Total: Retention rate:
400 92.9%
WELCOME
JUNE 2022 NEW MEMBER
MEMBER NIGHT
As of May 31, 2022 ONE TO FOUR YEARS Peak Remodel & Design Solutions......2021 Harmony Insurance Group...................2020 Johnson Printing...................................2018 Schluter Systems..................................2018 FIVE TO NINE YEARS Hy-Vee Stores........................................2017 Reagan Outdoor Advertising................2017 City of Elgin............................................2015 City of Lewiston.....................................2015 MBT Bank................................................2014 Altra Federal Credit Union...................2013 Stewartville EDA....................................2013 West Bank...............................................2013 TEN TO 14 YEARS Priority Construction Services............2012 Elias Construction, LLC.........................2011 Energy Panel Structures......................2011 Salas O’Brien .........................................2010 Wildwood Sports Bar and Grill............2010
Tuesday, July 26th 4:30pm - 7:00pm Mayowood Stone Barn
JAKE LARSON
Fencing (507) 993-2744 apexfence.us
15 YEARS TO 19 YEARS Allegra Marketing-Print-Mail...............2007 Legends Concrete, Inc...........................2007 Schoeppner, Inc.....................................2006 20 YEARS TO 24 YEARS Todd Eidem Construction, Inc..............2002 Two Rivers Habitat for Humanity........2000 Home Improvement Professionals, Inc....1999 25 YEARS OR MORE Hentges Glass Company.......................1991 Radcliffe Homes & Remodeling...........1988 Kreofsky Building Supplies..................1985 R&M Development Company...............1970 Alexander & Sons Builders..................1962 Palmer Soderberg, Inc..........................1958
JOB FREE
POSTINGS ABETH A S E N D E L IZ ED FORM COMPLET
D HERE N U O F S FORM
7 | FOUNDATIONS NEWSLTR
RAB JUNE
28
NETWORKING NIGHT
4:30PM - 6:30PM
Hors d’oeuvres | Refreshments | Yard Games
KNUTSON CONSTRUCTION
5985 Bandel Road NW | Rochester, MN
Knutson Construction has just completed their interior building remodel, come tour the building and join us for drinks, hors d’oeuvres, yard games, and socializing!
8 | JULY 2022
FROM THE PRESIDENT
BECKY HOLMEN President Rochester Area Builders, Inc Hello Wonderful People,
construction and building have been very busy in SE Minnesota. The delay in receiving products is causing us all a lot of stress. I wish you all the best of luck in getting your homes finished. Restrictions are getting lighter and lighter, and this Showcase will be a prime time to show off the quality of homes available from you, our members. It is important to keep your building expertise in the public eye, so when times are not as busy you will be in the forefront of people’s minds when they are ready to build or remodel. Being active within this association is important to your business even when you are busy, so when you do need new projects, you will have the resources and contacts to make your business grow.
presentation. One of our more popular outings for the young, and not so young, is the Sporting Clay Shoot. There will be an adult shoot on September 15th and a youth shoot on September 17th. Registration for this event opens on July 18th. All of these events are a great way to get your business recognized and do something nice for the community! The Builders, Brats and Building Safety in Stewartville was hosted by Valor Mechanical on Tuesday. There were several people in attendance, and I want to say thank you to Valor for hosting and supplying the amazing potato salad.
Thank you to the 40 Below crew, they made the building of bird I hope you are all enjoying the There are many opportunities for feeders with the kids at heat and able to spend quality Rochesterfest a wonderful networking and sponsorship. time with friends and family. I success. What a great way to get Builders, Bags & Brews is a have been busy here at Haley your face in front of the people of community event that RAB is Lighting but have been able to hosting for the Jeremiah Program our community. sneak away and do some fun of SE MN on Saturday, August 13th things with friends and family. I Let’s keep the momentum going at LTS Brewing Co. The early went to a Twins game and saw my and keep spreading the word of registration deadline is July 14th. first GRAND SLAM in person-that what RAB is doing for our You can register your teams now was amazing, TWINS WIN! I have wonderful communities and and sponsorship opportunities are been able to go to some of Carter’s legislative recommendations! still available. Studs, Struts and Legion Baseball games and I am Stilettos, which benefits the Two looking forward to going to some Rivers Habitat for Humanity, is of the Jackpot Pig Shows with coming up in October. We are in Ryan and Carter. search of creative people to enter a design for this event, and there I thought I should send out a reminder that it is time to get your are several levels of sponsorship still available. At the 2021 show, registrations in for the 2022 Fall we had a record amount of money Showcase of Homes and raised for the “People’s Choice” Becky Holmem Remodelers Tour. The 1st award, which included all of the Haley Lighting deadline for the Fall Showcase is donations made during the runway 2022 RAB President coming up on July 7th. I know
9 | FOUNDATIONS NEWSLTR
RAB
FORTY
BELoW CONNECTING. BUILDING. ENGAGING.
Thank You! 40 Below was back at RochesterFest this year providing bird feeder kits for Family Fun Day. We appreciate our volunteers who helped 137 kids with construction.
Thank You!
Thank you to the following for building and sponsoring a playhouse/Pergola to benefit Family Service Rochester. Heartwood Homes of Rochester, Inc. Peak Remodel & Design Solutions Schmidt Carpentry, LLC
10 | JULY 2022
SAVE THE DATE Rochester Area Builders Sporting Clay Shoot SEPTEMBER 15, 2022 Stay tunned for information about an additional opportunity on September 16th
Overall Event Sponsor
11 | FOUNDATIONS NEWSLTR
SILENT AUCTION
d o o F s k c Tru Team Prizes $50 - $200
REGISTER YOUR TEAM TODAY! Presented By
August 13, 2022
Beneficiary
Headlining Sponsor
LTS Brewing Co.
Visit Rochesterareabuilders.com for more information
12 | JULY 2022
SEPTEMBER 17 - 18 & 24 - 25, 2022 11 AM - 5 PM The 2022 Fall Showcase will be here before you know it! Get your latest and greatest homes, townhomes, developments, and townhome communities out in front of the public.
DEADLINES:
1st Deadline: July 7 - $200 discount 2nd Deadline: July 28 - $100 discount Final Deadline: August 18 Entry information and forms can be found HERE
Remodelers SEPTEMBER 17 - 18, 2022 11 AM - 5 PM Do you have a remodeling project you would like to have open to the public so they can see the finished results firsthand? The Remodelers Tour has been created to offer you this great marketing opportunity. It’s an excellent way to gain exposure for your company and your projects. All remodelers are eligible to participate, including designers, landscape contractors, exterior contractors, and more.
DEADLINES:
Discount Deadline: July 28 Final Deadline: August 18 Entry information and forms can be found HERE
13 | FOUNDATIONS NEWSLTR
2022 FALL SHOWCASE OF HOMES /REMODELERS TOUR MAGAZINE ADVERTISING INVESTMENT Sixth Page Quarter Page Half Page Half Page Full Page Inside Front Page Back Page
2.333 x 4.875 ......................................... $500 3.625 x 4.875 ......................................... $700 (v) 3.625 x10 .......................................... $900 (h) 7.5 x 4.875 ........................................ $900 8.5x11 (bleed size 8.75 x 11.25) ............. $1200 8.5x11 (bleed size 8.75 x 11.25) ............. $1500 8.5x11 (bleed size 8.75 x 11.25) ............. $1500
The 2022 Fall Showcase of Homes features new homes, townhomes, and subdivisions; and the 2022 Remodelers Tour features recent home renovations. Together, they are featured in the Rochester Area Builders-produced magazine which is the official program that includes details, descriptions, and photos for each home/subdivision. Participation to showcase a project is exclusive to RAB members, and members of the community are invited to enjoy the event. The digital magazine produces over 10,000 views, and the RAB Events app receives over 33,000 views during the event weekends. Limited printed copies will be available and also available at showcase entries during showcase hours. RAB will promote the digital magazine across multiple digital platforms with over 500,000 impressions. RAB has contracted with Tulip Tree Studios for ad sales and
design services. For more information on how to advertise in our magazine, contact Crystal at 507-218-8401 or at Crystal@ tuliptree-studios.com. Fall Showcase Weekends September 17-18 & 24-25, 2022 Remodelers Tour Weekend September 17-18, 2022
Remodelers
14 | JULY 2022
ROCHESTER AREA BUILDERS HOME SHOW 2023
We want your talent to be a part of supporting single moms and their children. The 2023 RAB Home Show will be featuring “Kitchens for Kids” – play kitchens for young children made by members of our community. Proceeds benefit Jeremiah Program. We invite you to be a part of this exciting activity! A raffle will be held during the event. The people’s choice winner will be determined by the largest number of raffle tickets for each project. These great mini-kitchens will be for children’s use but the raffle profits will go toward Jeremiah Program in Rochester MN. Jeremiah’s proven, holistic approach begins with establishing a supportive community for single mothers to pursue a career-track, college education. Through a combination of quality early childhood education, a safe and affordable place to live, and empowerment and life skills training, families find stability and a path out of poverty. You can also be a part of the Home Show and connect with customers by securing a 10’x10’ booth for the entire weekend (Friday, Saturday, and Sunday). Display, educate, and/or promote your business! Cost starts at $730. Open Registration begins in late summer, early fall.
February 10-11-12, 2023 Mayo Civic Center
Presented by
Benefit For
Find the registration form at rochesterareabuilders.com/Kitchens-for-Kids-Registration
Questions about the project? Contact Shelly@RochesterAreaBuilders.com Ph 507-282-7698
15 | FOUNDATIONS NEWSLTR
Federal Reserve Accelerates Rate Hikes BY ROBERT DIETZ on JUNE 15, 2022 To fight persistent inflation, the Federal Reserve has committed to significantly cooling demand. This approach reflects a non-monetary policy failure to fix underlying supply-side challenges that are pushing up inflation. The Fed lacks policy tools to make these supply-side fixes, so it must rely on demand-side impacts to bring down inflation by reducing economic growth. Consequently, at the conclusion of its June meeting, the Fed raised the federal funds target rate by 75 basis points, increasing that target to an upper bound of 1.75%. This is the largest increase for the funds rate since 1994 and is a clear response to elevated inflation data from May. Moreover, the Fed’s forward-looking projections indicate on a median participant basis an additional 205 basis points of tightening through 2023. Without convincing evidence of moderating inflation, the Fed is likely to continue to raise the target rate at each meeting by 50 basis points or more. The Fed’s target is a 2% inflation rate. The Fed’s June statement also confirmed its existing plan to reduce its balance sheet, including net reduction of $35 billion of mortgage-backed securities a month when fully phased in. The lack of change for the balance sheet reduction plan is a positive element of today’s news for housing, as there was a risk of a planned faster pace, which would further increase mortgage interest rates. Given signs of slowing economic activity, including six straight months of declines for home builder sentiment, a clear risk is that by falling behind the curve, the Fed will overshoot on tightening and bring on a recession as it fights inflation. This would not be the soft landing the Fed is attempting to orchestrate. Indeed, the NAHB economic forecast now includes a 2023 recession as financial conditions tighten. Chair Powell noted in his press conference that housing market conditions are slowing given higher mortgage rates.
The Fed notes that inflation remains elevated, citing the Ukraine war and global supply-chain issues, among other factors. Their revised economic projections find slowing economic growth, with a GDP outlook for 2023 of 1.7%. This will be very difficult to achieve. The Fed’s unemployment projection sees that rate increasing to 4.1% through 2024. So even under this optimistic outlook, this increase for joblessness would qualify as a growth recession. As this economic slowing occurs, the Fed’s projections indicates inflation will decline. Using the core PCE measure, the Fed sees a 4.3% rate for 2022, then 2.7% in 2023 and falling to 2.3% in 2024. This too will be difficult to achieve given the lagged impact on inflation from increasing residential rents, which materialize in inflation readings on a lagged basis when leases are renewed. This shelter impact on inflation is also a reminder that tightening interest rate conditions can affect supply, not just demand. Higher rents are due to a lack of housing supply. And higher interest rates will make it difficult to finance the development of additional housing supply.
It is important to note that there is not a direct connection between federal fund rate hikes and changes in long-term interest rates. During the last tightening cycle, the federal funds target rate increased from November 2015 (with a top rate of just 0.25%) to November 2018 (2.5%), a 225 basis point expansion. However, during this time
mortgage interest rates increased by a proportionately smaller amount, rising from approximately 3.9% to just under 4.9%. Previously, the Fed noted that inflation is elevated due to “supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.” While this verbiage may incorporate policy failures that have affected aggregate supply and demand, I do think the Fed should explicitly acknowledge the role fiscal, trade and regulatory policy is having on the economy and inflation as well. Given today’s projections, we reiterate our policy recommendation with respect to any possibility of a soft landing. Clearly, elevated inflation readings call for a normalization of monetary policy, particularly as the economy moves beyond covid-related impacts. However, fiscal and regulatory must complement monetary policy as part of this adjustment. Yet, many of these measures are simply beyond the Fed’s control. For example, higher inflation in housing is due to a lack of rental and for-sale inventory and cost growth for building materials, lots and labor. Higher interest rates will not produce more lumber. A smaller balance sheet will not increase the production of appliances and materials. In short, while the Fed can cool the demand-side of the economy (reducing inflation and growth), additional output on the supply-side is required in order to tame the growth in costs that we see in housing and other sectors of the economy. And efficient regulatory policy in particular can help achieve this goal and fight inflation.
16 | JULY 2022
REAL ESTATE LENDING Bank on ONB Bank for all of your Real Estate Lending needs.
Construction Purchase Refinance Improvements
contact us today
Rochester 975 34th Ave NW 507-280-0621
Stewartville 1960 1st Ave NE 507-504-1060
bankonONB.com
17 | FOUNDATIONS NEWSLTR
Goodin Company carries a full complement of products for the markets we serve. Are you in need of products for plumbing, HVAC, industrial, or pump and well applications?
PLUMBING
HVAC
INDUSTRIAL
PUMP & WELL
We are your Source of Supply, serving the industry since 1937.
www.goodinco.com MINNEAPOLIS | ST. PAUL | DULUTH | DETROIT LAKES | ST. CLOUD BRAINERD | ROCHESTER | FARGO | SIOUX FALLS | OMAHA EAU CLAIRE | WAUSAU | MADISON | MILWAUKEE | GREEN BAY
18 | JULY 2022
GET UP TO $5,400 TO GET THE JOB DONE Shown with equipment from independent suppliers which is not covered by the GM New Vehicle Limited Warranty. GM is not responsible for the safety or quality of independent supplier alterations.
USING THE PRIVATE OFFERS1 FOR NAHB MEMBERS IS EASY:
1. Get your NAHB proof of membership. 2. Visit your local Chevrolet, Buick or GMC dealer and mention this Private Offer. 3. Select an eligible vehicle(s) to purchase or lease and present your NAHB proof of membership. For even more value, combine this offer with the National Fleet Purchase Program and Business Choice Offers. For full details on the Private Offer, NAHB members should visit nahb.org/gm. Example offer for NAHB members who are business owners purchasing a 2021 Chevrolet Silverado 2500 HD Crew Cab 1LT 4WD. Up to
Up to
Up to
$1,000 + $3,400 + $1,000 = $5,400 Private Offer 1
National Fleet Purchase Program (FVX)2
Eligible Accessory Cash Allowance3, 4
In Potential Value
1 Private offer amount varies by model; up to $500 offer for retail delivery and up to $1,000 offer for fleet deliveries. Valid toward the purchase or lease of eligible new 2020, 2021 and 2022 model year vehicles. Customer must take delivery by 1/3/2022. Not compatible with some other offers. Not valid on prior purchases. Excludes all Cadillac vehicles; 2020 Buick Cascada, LaCrosse, Regal and Verano; Chevrolet Colorado 2SA, Sonic, Trax, Volt and GMC Canyon 2SA; 2020-2021 Encore 1SV; Chevrolet Blazer, Camaro, Corvette, Equinox 1SM, Malibu 1VL, Traverse 1L0; GMC Acadia 1SV and Terrain 2SA. Additional GM models may be excluded at GM’s sole discretion. See dealer for details. 2Offer available to qualified fleet customers through 1/3/2022. Not compatible with some other offers. Take delivery 1/3/2022. See dealer for details. 3To qualify, vehicle must be used in the day-to-day operations of your business and not solely for personal/ non-business-related transportation purposes. Must provide proof of business ownership. For complete program requirements, including information regarding offers, vehicles, equipment, options, warranties and ordering, consult your dealer or visit gmbusinesschoice.com. 4Eligible purchases must be equal to or greater than the amount of the cash allowance. Accessory Cash Allowance requires purchase of the eligible accessories from your dealer.
©2021 General Motors, LLC. All rights reserved. The marks appearing in this ad are the trademarks or service marks of GM, its subsidiaries, affiliates or licensors.
19 | FOUNDATIONS NEWSLTR
20 | JULY 2022
Weakening Builder Confidence Points to Economic Troubles Ahead BY ROBERT DIETZ on JUNE 15, 2022 Rising inflation and higher mortgage rates are slowing traffic of prospective home buyers and putting a damper on builder sentiment. In a troubling sign for the housing market, builder confidence in the market for newly built single-family homes posted its sixth straight monthly decline in June, falling two points to 67, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This marks the lowest HMI reading since June 2020. Six consecutive monthly declines for the HMI is a clear sign of a slowing housing market in a high inflation, slow growth economic environment. The entry-level market has been particularly affected by declines for housing affordability and builders are adopting a more cautious stance as demand softens with higher mortgage rates.
months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.
All three HMI indices posted declines in June. The The housing market faces both demand-side and supply- component charting traffic of prospective buyers fell side challenges. Residential construction material costs five points to 48, marking the first time this gauge has fallen below the breakeven level of 50 since June 2020. are up 19% year-over-year with cost increases for a The HMI index gauging current sales conditions fell one variety of building inputs, except for lumber, which has experienced recent declines due to a housing slowdown. point to 77 and the gauge measuring sales expectations in the next six months fell two points to 61. On the demand-side of the market, the increase for mortgage rates for the first half of 2022 has priced out Looking at the three-month moving averages for a significant number of prospective home buyers, as regional HMI scores, the Northeast fell one point to 71, reflected by the decline for the traffic measure of the the Midwest dropped six points to 56, the South fell two HMI. points to 78 and the West posted a nine-point decline to 74. Derived from a monthly survey that NAHB has been conducting for more than 35 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current singleThe HMI tables can be found at nahb.org/hmi. family home sales and sales expectations for the next six
21 | FOUNDATIONS NEWSLTR
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 Advertising Rates
Per Issue
12 Issues
New Member 12 Issues
Full color 1/2 Horizontal
c $70.00
c $650.00
c $490.00
Full color Full Page
c $90.00
c $900.00
c $675.00
Full Color Full Page Press Release
c $25.00
Newsletter Display Ad Dimensions 1/2 Horizontal Full
8-1/2 x 5-1/2 8-1/2 x 11
Send artwork to Shelly@RochesterAreaBuilders.com by the 15th of the month to be included in the upcoming Foundation Newsletter.
An event to support construction educational opportunities.
28TH ANNUAL GOLF OUTING
Willow Creek Golf Course
AUGUST 12
1700 48th St SW Rochester, MN 55902
FRIDAY | 2022
11 am | REGISTRATION & LUNCH 12 pm | SHOTGUN START 5 pm | APPETIZERS, AWARDS, PRIZES Registration Includes
$125
Early registration received before July 22
$150
Final registration received between July 23 - August 5.
Click HERE for Registration & Sponsorships.
• 18 Holes of Golf • 1/2 Cart • Golfer Gift • Lunch & Appetizers
nawicsemn.org
For questions, contact: Jessi Hanson | 507-272-8232 | info@nawicsemn.org
@NAWICSEMN
23 | FOUNDATIONS NEWSLTR
24 | JULY 2022
ROCHESTER BUILDING PERMITS
NEW RESIDENTIAL Single Family Dwelling Townhome Dwelling
2022
VALUATION
2021
MAY 2022 2014 2015 2016 2017 2018 2019 2020 2021 2022
VALUATION
13
5,884,064
24
8,489,082
0
0
2
600,000
January
11
20
25
15
19
February
14
19
15
20
28
30
31
44
6
17
23
9
16
5
25
27
13
8
11
32
35
21
Two-Family Houses
2
290,000
0
0
March
Manufactured Home
0
0
0
0
April
25
22
33
45
40
23
19
19
28
May
35
19
56
43
28
27
19
26
13
113
110
160
167
128
88
100
111
82
June
47
51
41
52
38
31
21
30
July
38
29
44
45
36
26
26
25
August
60
33
47
30
31
24
17
24
September
23
27
52
35
39
12
30
20
October
35
49
25
36
29
27
28
16
November
26
23
12
41
21
47
23
19
December
27
42
37
33
25
34
21
8
369
369
418
429
347
289
266
253
Multi-Family Bldgs (Units)
9
1,422,000
127
14,800,000
TOTAL
EXISTING RESIDENTIAL Deck Addition
19
261,962
34
69,136
Room Addition
3
183,791
0
0
Porch Additions
2
53,000
4
69,000
Other Additions
2
8,100
3
23,100
Basement Finish
20
458,199
30
548,288
Alterations
53
1,208,898
51
649,826
Multi-Family Addition
1
6,500
0
0
Multi-Family Alterations
7
759,234
5
70,500
TOTAL
YEAR TO DATE STATISTICS
NEW COMMERCIAL
2022 NO.
BUILDING PERMITS ISSUED TO DATE
Assembly (Church)
0
0
0
0
Assembly (General)
0
0
0
0
Assembly (Restaurant/Bar)
0
0
0
0
Business
0
0
0
0
Education
0
0
1
23,476,142
Factory/Industrial
0
0
0
0
Institution
0
0
0
0
Mercantile
0
0
1
1,300,000
Miscellaneous
0
0
0
0
Electrical (Temp. Service)
Residential (Apartment)
0
0
0
0
Mechanical (HVAC)
Residential (Care/Assisted Living)
0
0
0
0
Mechanical (Gas Piping)
Residential (Care/Hotel/Motel)
0
0
0
0
Mechanical (Fireplace)
Storage (General)
0
0
0
0
Mechanical (Hydronic)
Storage (Parking Garage)
2
112,000
0
0
Plumbing
Storage (Warehouse)
0
0
0
0
Utility (General)
0
0
2
329,500
Utility (Private Garage)
0
0
1
75,000
799
273,455,745
910
207,212,927
72
29,960,858
101
34,680,569
Multi-Family Buildings Total Units: 276
4
33,175,115
1
14,800,000
TRADE PERMITS ISSUED TO DATE
3991
75,201,939
4324
52,736,631
Electrical
1549
34,912,223
1657
24,756,283
81
43,250
97
30,855
1036
15,593,917
1131
14,216,547
218
352,643
261
356,662
114
569,025
150
779,817
109
10,943,707
68
3,765,155
884
12,787,174
960
8,831,312
4790
348,657,684
5234
259,949,558
TOTAL PERMITS YTD
Information and downloads available at Rochester Building Safety Department’s website: Rochester Permits
Key metrics by report month and for year-to-date (YTD) starting from the first of the year.
Key Metrics
5,823,204
0
0
27
11,323,184
24
7,380,956
Structural Shell
0
0
0
0
Pending Sales
“White Box”
0
0
0
0
Closed Sales
Interior Demolition Only
0
0
0
0
Days on Market
Other Phased Permits
VALUATION
Single Family Dwelling
4
Alterations
2021 NO.
Activity Overview
EXISTING COMMERCIAL Addition
VALUATION
82
0
0
0
0
OTHER CONSTRUCTION
Historical Sparkbars
New Listings 5-2019
5-2020
5-2021
5-2022
5-2019
5-2020
5-2021
5-2022
5-2019
5-2020
5-2021
5-2022
5-2019
5-2020
5-2021
5-2022
5-2019
5-2020
5-2021
5-2022
5-2019
5-2020
5-2021
5-2022
5-2019
5-2020
5-2021
5-2022
5-2019
5-2020
5-2021
5-2022
5-2019
5-2020
5-2021
5-2022
5-2019
5-2020
5-2021
5-2022
Median Sales Price
Avg. Sales Price
Pct. of Orig. Price Received
Business Signs
9
123,575
11
190,040
Advertising Signs
0
0
0
0
Affordability Index
Footings & Foundations
1
172,040
0
0
Homes for Sale
Demolition
0
0
0
0
Months Supply
5-2021
5-2022
Percent Change
YTD 2021 YTD 2022
545
616
+ 13.0%
2,440
2,525
+ 3.5%
554
526
- 5.1%
2,386
2,335
- 2.1%
525
519
- 1.1%
1,915
1,923
+ 0.4%
32
25
- 21.9%
43
37
- 14.0%
$250,000
$290,000
+ 16.0%
$232,900
$265,000
+ 13.8%
$295,899
$326,041
+ 10.2%
$267,582
$306,493
+ 14.5%
101.1%
101.5%
+ 0.4%
99.2%
99.8%
+ 0.6%
170
118
- 30.6%
183
129
- 29.5%
461
533
+ 15.6%
--
--
--
0.9
1.1
+ 22.2%
--
--
--
Percent Change
Current as of June 4, 2022. All data from Southeast Minnesota REALTORS® and NorthstarMLS®. Provided by the Minnesota Association of REALTORS®. Report © 2022 ShowingTime. | 2
25 | FOUNDATIONS NEWSLTR
OLMSTED COUNTY PERMITS YTD NEW RESIDENTIAL
2022
VALUATION
2021
VALUATION
Single Family-Detached
26
11,002,927
15
4,174,945
Single Family-Attached
0
0
4
513,188
10
857,721
7
315,694
22
137,444
8
43,470
Garage
RESIDENTIAL Deck Addition Alterations Garage Addition
5
272,029
5
362,019
101
1,953,464
34
416,531
0
0
2
36,426
May 2022
CD Report BUILDING DIVISION
Commercial building plans submitted
Residential building plans submitted
Commercial inspections completed
28
61
2022: 748 Average:914
NEW COMMERCIAL/INDUSTRIAL Recreational
0
0
0
0
Church/Religious
0
0
0
0
Industrial/Warehouse
0
0
0
0
Service/Repair Station
1
1,101,813
0
0
Store/Restaurant
1
78,552
0
0
Nonresidential Building
1
616,530
1
134,573
COMMERCIAL/INDUSTRIAL
2022
Addition
VALUATION
2021
VALUATION
0
0
1
121,056
Alterations
10
406,509
2
61,000
Re-roofing
3
286,563
0
0
Pool, Retaining Wall, etc.
7
264,020
8
136,528
Manufactured Homes
0
0
9
0
OTHER STRUCTURES
MISCELLANEOUS PERMITS Mechanical
74
353,395
71
547,900
Plumbing
33
91,578
42
397,850
TOTAL PERMITS
294
17,422,545
209
7,261,190
OLMSTED COUNTY PERMITS - MAY
YTD NEW Housing Units
Residential inspections completed
2022: 1,631 2022: 84 Average: 1,754 Average: 100
Residential plan review time
Commercial plan review time
4 Weeks
2.5 Weeks
YTD Residential permits issued
YTD Commercial permits issued
YTD Trade permits issued
2022: 526 Average: 531
2022: 173 Average: 153
2022: 3,991 Average: 3,966
YTD Residential valuations
2022
YTD Commercial valuations
2022
YTD Alterations valuations
2022
YTD Trade valuations
2022
$64,150,949
$99,358,319
$96,926,710
$75,201,939
$52,619,880
$59,535,053
$81,907,312
$59,033,651
Average
Average
Average
Average
TOWNSHIPS/CITY
2022
City of Byron
VALUATION
2021
VALUATION
30
1,882,813
1
121,056
1
27,840
2
61,000
Marion Township
23
598,948
0
0
Oronoco Township
6
979,519
City of Stewartville
19
224,763
2
999,404
Eyota Township
Quincy Township
PINE ISLAND BUILDING PERMITS MAY 2022 NEW RESIDENTIAL
NUMBER
VALUATION
Single Family Detached
43
1,169,231
Single Family Attached
0
0
Basement Finish
1
25,000
Deck Addition
1
10,000
Existing Residential
PLANNING DIVISION
YTD Building permit plans reviewed
YTD Zoning Certificates submitted
YTD Type I Applications submitted
2022: 2731 Average: 2167
2022: 40 Average: 45
2022: 18 Average: 29
YTD Type II Applications submitted
YTD Type III Applications submitted
2022: 2 Average: 2
2022: 33 Average: 30
26 | JULY 2022
What Do Home Buyers Buy after Moving BY NATALIA SINIAVSKAIA on JUNE 13, 2022
N
AHB analysis of Consumer Expenditure Survey (CES) data from the Bureau of Labor Statistics shows that during the first year after closing on a home sale, home buyers tend to spend considerably more money on furnishings, appliances and remodeling compared to non-moving owners. Buyers of new homes spend most, spending four times as much as non-moving owners and twice as much as buyers of existing homes. This post reveals particular items that are most popular with home buyers and help explain changes in their spending behavior triggered by a house purchase. It might come as a surprise but the biggest outlay in the budget of recent new home buyers is alterations and repairs. During the first year after closing,
new home buyers spend close to $12,000 on these projects, while buyers of existing homes average less than half of that amount ($5,760). Non-moving owners spend even less on property alterations and repairs – under $3,000 in a typical year. The puzzle is easily solved by going over the list of the specific types of remodeling projects that homeowners engage. New home buyers spend over $4,000 on building outdoor patios, walks, fences, pools, driveways and additional $3,167 on landscaping. In comparison, existing home buyers spend $512 on outdoor features and $335 on landscaping. The corresponding average spending by non-moving owners are $250 and $192 per year. Average spending is estimated for all households in the group regardless whether
27 | FOUNDATIONS NEWSLTR
they purchased a certain item or not. Thus, higher averages may point to larger and/or more frequent spending by the group.
dryers, followed by refrigerators/home freezers, lawnmowers, televisions, and computer hardware/ systems.
New home buyers also significantly outspend existing home buyers and non-moving owners when it comes to finishing a basement, attic, enclosing a porch ($1,740 vs $275 and $69, respectively) or building an addition or a new structure, including a porch ($1,003 vs $253 and $283).
New and existing home buyers spend even more on furnishings than appliances. During the first year after moving, new home buyers spend $5,122 on furnishings. This is nearly twice as much as existing home buyers spend and 5.6 times higher, compared to non-moving owners’ spending on furnishings. The differences are not only large but also most consistent when comparing expenditures on furnishings. Compared to existing home buyers, new home buyers spend more on every single item the CES counts as furnishings. Existing home buyers, in turn, outspend non-moving owners on all furnishings with the only exception of non-electric cookware, where their annual spending is similar.
At the same time, existing home buyers spend more than new home buyers on remodeling rooms, painting, wallpapering, plastering, flooring, roofing, insulation, siding, window panes, screens, storm doors, and HVAC work. New home buyers also spend more on appliances – $4,254, compared with $2,500 for existing home buyers, and $1,442 for non-moving owners. On average, new home buyers tend to spend most on various types of television. Even though new television sets may not be the most expensive appliance new home buyers invest into, these are unlikely to be included in the price of the new home. As a result, buying television sets for multiple rooms in the new house can add up to the high level of spending, reflecting the high frequency of these purchases by new home buyers rather than a particularly high cost of the item. The next biggest outlays in the appliance budget of new home buyers are clothes washers/dryers, lawnmowers/other yard equipment, and new refrigerators or home freezers. Coincidentally, new home buyers outspend existing home buyers and non-moving owners on all these big-ticket items. The high level of spending by new home buyers may seem surprising considering that many new homes come with installed appliances but suggests that these purchases are nevertheless more frequent among these households. The Builder Practices Survey conducted by Home Innovation Research Labs shows that two thirds of new single-family detached homes built in 2019 came with no clothes dryers. At the same time, virtually all new homes came with cooking stoves, ranges, or ovens. This explains why new home buyers have lower spending on cooking stoves, ranges and minimal spending on built-indishwashers and microwave ovens. Rather, new home buyers spent most on items that are less likely to be included in the price of new homes. The appliances that consume the largest share of the budget of existing homeowners are clothes washers/
The two biggest ticket items for home buyers are sofas and bedroom furnishings, including mattresses and springs. On average, new home buyers spend close to $860 on sofas and $718 on bedroom furnishings. The corresponding spending by existing home buyers on these items average just over $610 during the first year after moving. This is considerably higher than non-moving owners typically spend on sofas ($148) and bedroom furnishings ($204) per year. A home purchase, especially when it is a new home, has a particularly large effect on expenditures on window coverings (blinds, shades), as well as curtains and drapes. During the first year after moving, new home buyers spend $516 on window coverings outspending non-moving owners and existing home buyers 22 and 4 times, respectively. The differences in spending patterns are similarly large when comparing spending on dining room and kitchen furniture. New homebuyers outspend nonmoving owners 11 times over ($460 compared to $40), while existing home buyers (with an average annual spending on dining room and kitchen furniture of $207) outspend non-moving owners 5 times. Even though during the first year after closing on the house, home buyers tend to spend on furnishings, appliances, and property alterations considerably more compared to non-moving owners, most of the demand for appliances, furnishings, and remodeling projects in a given year is generated by non-moving homeowners, because they outnumber home buyers by such a wide margin.
28 | JULY 2022
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Qualified Customers
Advertise on the RAB Website!
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Contact Elizabeth Elizabeth@RochesterAreaBuilders.com or 507-282-7698
29 | FOUNDATIONS NEWSLTR
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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
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30 | JULY 2022
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