FOUNDATIONS NEWSLTR MAY

ROCHESTER AREA BUILDERS, INC.

April 15 - 16 & April 22 - 23, 2023

PRESENTED BY EVENT SPONSOR

2023 MARCH MEMBERSHIP REPORT

Membership Total: 407

Retention rate: 94.3%

STAFF

John Eischen, Executive Director

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

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

VICE PRESIDENT

Adam Giannini, Knutson Construction

SECRETARY

Jennifer Mitchenll, Edina Realty

TREASURER

Vanessa Hines, Widseth

PAST PRESIDENT

Becky Holmen, Haley Lighting

MISSION STATEMENT

DIRECTORS

Derrick Chapman, Schmidt Carpentry

Adam Kramer, Kramer Contracting

Jarett Jones, Merchants Bank

Aaron Thompson, The Design Connection

Austin Ryan, Ryan Windows & Siding

Kelsey Vaszily, Kraus-Anderson Construction

Melissa Barbour, TLS Companies, LLC

Joe West, Valor Mechanical

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

BUILDERS EXCHANGE COUNCIL CHAIR

Katie Reinhart, Kraus-Anderson Construction

COMMERCIAL BUILDERS COUNCIL CHAIR

Keith Kranz, LVC Companies

DEVELOPMENT COUNCIL CHAIR

TBD

REMODELERS COUNCIL CHAIR

Becky Holen, Haley Lighting

40 BELOW CHAIR

Adam Giannini, Knutson Construction

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

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.

May 2023

APRIL

MAY

JUNE

27

Rochester Area Builders

2023 Calendar of Events

OCTOBER 24

NOVEMBER

TBD

DECEMBER

JULY 4

TBD

AUGUST 12

SEPTEMBER

FROM THE PRESIDENT

everyone a winner when there’s free bourbon and barbecue on the menu. Don’t miss it!

Don’t forget to mark your calendars for April 27th – Registration opens for the annual Golf Outing, which has been selling out earlier and earlier each year. Last year, registration filled up in 41 minutes! You may want to set a calendar alert so you don’t miss out this year! The Golf Outing is one of my favorite events of the year. This year, it will take place on June 1st at Willow Creek Golf Course.

I always find myself faced with tough decisions this time of year. Turn on the furnace or the air conditioner? Get out the snowblower or the lawn mower? Decisions, decisions. While mother nature continues to keep us guessing, we’ve gotten some glimpses of nicer weather, and an RAB calendar full of events that signify Spring and Summer are around the corner, and numerous opportunities to network.

The Spring Showcase of Homes has begun and there’s one more weekend (April 22nd & 23rd) to visit the masterpieces that our members have on display this year. Thank you to all of our exhibitors and sponsors that have participated in the Home Show and the Spring Showcase of Homes this year! It’s a testament to the resiliency of this organization and its members to continue to grow and thrive after the headwinds we’ve experienced in recent years. Truly amazing.

Haley Comfort Systems will be hosting this month’s Networking Night on Tuesday, April 25th, and they’re planning a free bourbon tasting and BBQ competition. It’s hard not to consider

We’re also looking ahead to this year’s annual Builders, Bags & Brews event. If you’re not familiar with the event, it’s a community bags (aka cornhole) tournament that raises funds for local non-profits. This year, funds raised will go to support Paws & Claws Humane Society. You can help support the event and Paws & Claws through sponsorships, by entering a team, or joining as a spectator. A big thanks to our 40 Below young professionals group for planning and organizing such a great event.

Last but not least, we’re looking for members to host carpentry students from Kasson-Mantorville on May 3rd as part of our Job Shadow program. Workforce continues to be an ongoing challenge for many in our industry and participating in our Job Shadow program is a great way to help the next generation get exposure to and build interest in a career in the trades. I strongly encourage everyone to take part in this program to help maintain a vibrant and passionate future workforce.

I hope spring is here to stay, and you’re all able to get out and take advantage of the good weather and the many great events we have planned!

Jason Scrimshaw, P.E. Kimley-Horn 2023 RAB President

JASON SCRIMSHAW President

Rochester Area Builders, Inc

WELCOME NEW MEMBERS

APRIL 2023

Metropolitan Mechanical Contractors (MMC)

Dave Anderson

Mechanical Contractor

507.424.9096

metromech.us

United Way of Olmsted County

Jennifer Teske

Community Group

507.287.2000

uwolmsted.org

SAVE THE DATES!

FALL SHOWCASE OF HOMES

SEPTEMBER 16-17 & 23-24, 2023

May 16 Registration Opens

July 6 1st Discount Deadline

July 27 2nd Discount Deadline

August 17 Final Deadline

REMODELERS TOUR

SEPTEMBER 16-17. 2023

May 16 Registration Opens

July 27 Discount Deadline

August 17 Final Deadline

COMMITTEES & COUNCILS

With over 20 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.

Contact Rebekah if you are interested in joining a council or committee.

Thank you Tulip Tree Marketing for hosting the March Networking Night. Lots of great conversation and networking were had by all.

June 1ST Willow Creek Golf Club

11:00am Shotgun Start

REGISTRATION OPENS NEXT WEEK!

APRIL 27TH AT 8:30AM

Sponsor a Green and network with the golfers!

Door Prizes Needed!

Contact Shelly for information

GOLDEN TEE SPONSOR

JOB SHADOWING OPPORTUNITIES

Rochester Area Builders is providing job shadow opportunities for students in the Kasson - Mantorville carpentry program on Thursday, May 3rd from 8:45am to 11:45am. We are looking for hosts in the following areas:

• ACCOUNTING

• ARCHITECT

• AUTO BODY/PAINTING

• CABINETRY

• CARPENTER

• CONCRETE

• ELECTRICIAN

• FINANCIAL ADVISOR

• HEAVY EQUIPMENT INSURANCE

• PAINTER

• PLUMBING SURVEYING WELDING

CONTACT REBEKAH at Rebekah@RochesterAreaBuilders.com

40 BELOW PROFESSIONAL DEVELOPMENT

On March 22nd, members of 40 Below had the pleasure of listening to Maria Serbus, a local resilience coach & speaker, who shared techniques on how to reduce stress in our lives.

Thank you to everyone who participated in the workshop!

Interested in learning more about 40 Below, contact Rebekah

A LITTER BIT BETTER

Date: April 27th

Time: 4:00pm

Location: Meet at northeast corner of Rochester Athletic Club parking lot. - 3100 19th St NW Rochester MN 55901

One week every spring, thousands of volunteers work together across Rochester to scour ditches, parks, waterways and boulevards to pick up tons of trash! Service groups, businesses, scout troops, schools, faith groups, and neighborhoods pitch in to make A Litter Bit Better! an annual event in the City of Rochester.

40 Below has volunteered to clean up the paths on both sides of 19th St NW from Valleyhigh Drive to West Circle Drive. If you are interested in helping please register through the link provided or contact Rebekah Fierst.

For a better visual view this map and look for blue area designated 501.

YOUR COMMUNITY BANK

Who We Are

We are locally owned and managed. This means all decisions are made locally by our staff who are dedicated to providing friendly, efficient, and personalized service. ONB offers a wide array of services and products to meet your personal or business banking needs.

MORTGAGE ACTIVITY INCREASES AS RATES FALL FOR 5TH STRAIGHT WEEK

BY JESSE WADE on APRIL 12, 2023

Per the Mortgage Bankers Association’s (MBA) survey through the week ending April 7th, total mortgage activity increased 5.3% from the previous week and the average 30-year fixedrate mortgage (FRM) rate fell ten basis points to 6.30%. The FRM rate has fallen 41 basis points over the past month.

The Market Composite Index, a measure of mortgage loan application volume, rose by 5.3% on a seasonally adjusted (SA) basis from one week earlier.

Purchasing activity increased 7.8%, while refinancing activity increased 0.1% week-over-week.

Purchasing activity has risen over the past month as interest rates have fallen but the seasonally adjusted purchase index was 31.4% lower than one year ago. Refinancing activity has seen a slight uptick over the past month but will remain low as many who refinanced over a year ago locked into lower rates; the Refinancing Index is down 56.9% from one year ago.

The refinance share of mortgage activity fell from 28.6% to 27.0% over the week, while the adjustablerate mortgage (ARM) share of activity also decreased to 6.0% from 7.2%. The average loan size for purchases was $431,900 in the first week of April, up slightly from $430,500 over the month of March. The average loan size for a FRM surpassed the April 2022 level, up from $359,800 to $362,000 in the first week of April 2023. The average loan size for refinancing is well below the 2022 level, down from $288,500 to $267,700.

A SPECIAL THANK YOU

VAULT SPONSORS

Mayo Clinic

Premier Bank

RAISE THE ROOF SPONSOR

Jan & Rich Vetter

HOUSEWARMING SPONSORS

Altra Federal Credit Union

Haley Lighting

FRAMING SPONSORS

Beyond Kitchens

First Alliance Credit Union

DESIGNERS

Beyond Kitchens

Design Studio B/A.Berry Hair

Edina Realty

Haley Lighting

Interiors by J.Curry, LLC

Mallory & Breana

NAWIC

Rochester Title

Threshold Arts

Tulip Tree Marketing/Valor Mechanical

Vicki Nelson of Elcor Realty

GROUNDBREAKING SPONSOR

Charlie’s Eatery & Pub

MEDIA SPONSOR

KTTC TV

FINISHING SPONSORS

Foresight Bank

Rochester Area

Hawkins Ash CPA’s

Real Deals on Home Décor

Rochester Title

Think Bank

ROUGH-IN SPONSORS

Ama La Vita

Design Studio B

Doug Franta Construction

Penz Dental

Red’s Electric

Stewartville Family Dentistry

Top Shop of Rochester

EVENT PARTNERS

Aventi Entertainment

Faulhaber Foto

Mirror Me That

Rocco Altobelli

NAWIC 2023

MIDWEST REGION SPRING FORUM

MAY 4 - MAY 6

KAHLER GRAND HOTEL

ROCHESTER, MN

Check-in begins Thursday, May 4 at 3pm. Join SE MN NAWIC Chapter 346 for a city tour from 3-5pm & Cinco de Mayo Welcome Reception at Peace Plaza from 5-8pm. Visit TheKahlerHotel.com and use Group Code: 050423NAWIC to book your room.

FRIDAY, MAY 5 SATURDAY, MAY 6

8am: Opening Ceremony

9am: Breakouts

Sustainability, EDI and Data

Bloomberg Challenge

Diversity in Sustainable Construction

WELL Building Standard

Affordable Housing

Global Sustainable Challenges

DMC Sustainability Walk

5-10pm: Cinco de Derby Awards Gala

REGISTRATION

7am: Pure Barre

9am: Keynote - Thriving in Chaos with Corinne Hancock

11am: General Session/NAWIC Business

3:30pm: Adjourn

QUESTIONS?

Contact Jodi Wiemerslage 507 696 2193 jwiemerslage@huntelec com

Corinne Hancock

&

SPONSORSHIP OPPORTUNITIES

OPPORTUNITY SCHOLARSHIP

GRADUATING HIGH SCHOOL STUDENTS

POST-SECONDARY SCHOLARSHIPS

Go to https://qrco.de/ScholarshipApp 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.

Rochester Area Builders, Inc. is proud to announce their 2023 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 2023. To be eligible for any scholarships, applications must be postmarked by May 8, 2023.

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

AFFORDABILITY PYRAMID SHOWS 64.8 MILLION HOUSEHOLDS CANNOT BUY A $250,000 HOME

BY FAN-YU KUO on APRIL 12, 2023

As described in a previous post, NAHB’s recently released its 2023 Priced-Out Estimates, show that 96.5 million households are not able to afford a median priced new home, and that an additional 140,436 households would be priced out if the price goes up by $1,000. This post focuses on the related U.S. housing affordability pyramid, showing how many households have enough income to afford homes at various price thresholds.

The pyramid uses the same standard underwriting criterion as the priced-out estimates to determine affordability: that the sum of mortgage payments, property taxes, homeowners and private mortgage insurance premiums should be no more than 28% of the household income. Based on this, the minimum income required to purchase a $150,000 home at the mortgage rate of 6.25% is $45,672.63. In 2023, about 39 million households in the U.S. are estimated to have incomes no more than that threshold and, therefore, can only afford to buy homes priced no more than $150,000. These 39 million households form the bottom step of the pyramid. Another 25.8 million can only afford to pay a top price of somewhere between $150,000 and $250,000 (the second step on the pyramid). Each step represents a maximum affordable price range for fewer and fewer households. Obviously, housing affordability is a greater concern for households with annual income at the lower end of the distribution.

The top step of the pyramid shows that around 3 million households can buy a home priced above $1.55 million. While this market is significant and important, market analysts should never only focus on them to the exclusion of the larger number of Americans with more modest incomes that support the pyramid’s base.

ROCHESTER BUILDING PERMITS

YEAR TO DATE STATISTICS

TCPA BUILDING PERMITS

OLMSTED COUNTY PERMITS YTD

PINE ISLAND BUILDING PERMITS

INFLATION SHOWS FURTHER SIGNS OF COOLING

BY FAN-YU KUO on APRIL 12, 2023

Consumer prices in March saw the smallest year-overyear gain since May 2021 with a ninth consecutive month of a deceleration. While the shelter index (housing inflation) experienced its smallest monthly gain since November 2022, it continued to be the largest contributor to the total increase, accounting for over 60% of the increase in all items less food and energy.

The Fed’s ability to address rising housing costs is limited as shelter cost 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 at best limited. In fact, further tightening of monetary policy will hurt housing supply by increasing 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 later in 2023.

vehicle insurance (+1.2%), airline fares (+4.0%), household furnishings and operations (+0.4%) as well as new vehicles (+0.4%) showed sizeable monthly increases in March. Meanwhile, the indexes for used cars and trucks (-0.9%) and medical care (-0.3%) declined in March.

The index for shelter, which makes up more than 40% of the “core” CPI, rose by 0.6% in March, following an increase of 0.8% in February. The indexes for owners’ equivalent rent (OER) and rent of primary residence (RPR) both increased by 0.5% over the month. Monthly increases in OER have averaged 0.6% over the last three months. These gains have been the largest contributors to headline inflation in recent months.

During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 5.0% in March, following a 6.0% increase in February. This was the slowest annual gain since May 2021. The “core” CPI increased by 5.6% over the past twelve months, following a 5.5% increase in February. The food index rose by 8.5% while the energy index fell by 6.4% over the past twelve months.

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 (slower) than overall inflation, the real rent index rises (declines). 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 rose by 0.1% in March.

The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.1% in March on a seasonally adjusted basis, following an increase of 0.4% in February. The price index for a broad set of energy sources fell by 3.5% in March as the gasoline index (-4.6%), the natural gas index (-7.1%) and the electricity index (-0.7%) all decreased. Excluding the volatile food and energy components, the “core” CPI rose by 0.4% in March, following an increase of 0.5% in February. Meanwhile, the food index was unchanged in March with the food at home index falling 0.3%.

Most component indexes continued to increase in February. The indexes for shelter (+0.6%), motor

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, starting at $299.

Contact Elizabeth Elizabeth@RochesterAreaBuilders.com or 507-282-7698

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nahb.org/nissan

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

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 Elizabeth for more information