FOUNDATIONS NEWSLTR OCTOBER

ROCHESTER AREA BUILDERS, INC.

THANK YOU TO EVERYONE WHO SUPPORTED THE RAB SPORTING CLAY SHOOTS!

2023 AUGUST MEMBERSHIP REPORT

Membership Total: 405

Retention rate: 92.8%

STAFF

Patrick Sexton, Executive Director Pat@RochesterAreaBuilders.com

Shelly Bahlmann, Publications & Special Events Director Shelly@RochesterAreaBuilders.com

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

Rebekah Fierst, Member & Community Engagement Director Rebekah@RochesterAreaBuilders.com

Ambassadors, Awards, Commercial Builders Council, Community Relations, Education, Membership, Fashion Show, Program, Remodelers Council, Executive & 40 Below

Elizabeth Sullivan-Burton, Planroom & Finance Director Elizabeth@RochesterAreaBuilders.com

Builders Exchange Trustees, Showcase, Remodelers Tour and Website

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 Holmen, 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.

Rochester Area Builders

2023 Calendar of Events

OCTOBER

16 Past President’s Dinner

24 Networking Night @ F&M Bank

NOVEMBER

TBD Past Presidents Dinner

23-24 Office Closed – Thanksgiving Holiday

DECEMBER

8 Holiday Party @ The Hilton

February 27-29, 2024 @ Las Vegas, NV

February 02-04, 2024 @ Mayo Civic Center

June 6, 2024 @ Willow Creek Golf Course

WELCOME NEW MEMBERS

SEPTEMBER 2023

Aspen Waste Systems

Bill Cutshall

Outdoor Services

507.222.8001

aspenwaste.com

Mayowood Homes, LLC

Ryan Ruskell Residential Builder

507.281.9800

The City of Rochester has issued a Request for Proposal for the preparation of the 2025-2029 Consolidated Plan.

The proposal explains: “With this Request for Proposal (RFP), we are searching to secure professional services to develop a Five-Year Strategic Plan (Consolidated Plan) for the City of Rochester, MN for HUD Program Years 2025-2029. […] The Consolidated Plan is designed to be a collaborative process whereby a community establishes a unified vision for affordable housing and community development actions. The Consolidated Plan must identify a jurisdiction’s housing and community development needs, set priorities, and describe how HUD and other resources will be used for activities designed to meet needs.”

Companies that wish to review or submit a proposal can find information at https://www. rochestermn.gov/government/departments/public-works/rfps-bid-projects/requests-for-proposals Requests for clarification must be sent to the project contact, Brent Svenby (CDBG Administrator) at bsvenby@rochestermn.gov by the end of day September 29, 2023. Proposals are due to the City by 5:00 PM on Monday, October 16, 2023.

Thank You!

Thank you to the sponsors who supported this fun event. Everyone had a great time. See you next year!

CONGRATULATIONS!

HIGH TEAM SCORE - 85.6

Tiffany Larson - 68

Jake Larson - 88

Nate Nagel - 87

Dan Hysell - 84

Jason Olson - 87

Lanny Lsensee - 86

HIGH INDV. SCORE - 88

Jake Larson

CONGRATULATIONS!

HIGH FEMALE SCORE - 61

Adyson Wradislavsky - Austin Clay Target Team

HIGH SCORE - 95

Hunter Hysell - Stewartville Tigers

HIGH TEAM SCORE - 91

Stewartville Tigers

Jackson Hewitt - 87

Hunter Hysell - 95

Ethan Nagel - 91

Ty Brown - 97

Logan Jackson - 83

Kenny Sylvester Construction, LLC

Thank you J.F. Ahern for hosting the August Networking Night. Lots of great conversation and networking were had by all.

We are seeking three members for the Board of Directors for 2024. Board members can serve two terms of two years each.

One builder director and two associate directors will have their terms expiring.

Current Board members and their status for 2024:

Builders

Melissa Barber

Derrick Chapman

Adam Giannini

2nd Year of 2nd Term

1st Year of 2nd Term

2nd Year of 2nd Term

Austin Ryan 1st Year of 2nd Term

Aaron Thompson 1st Year of 2nd Term

Kelsey Vaszily 2nd Year of 1st Term

OPEN

Associates

Julie Herrera-Lemler 1st Year of 2nd Term

Vanessa Hines 1st Year of 2nd Term

Jarret Jones 1st Year of 2nd Term

Jason Scrimshaw Past president

Joe West 1st Year of 2nd Term OPEN OPEN

If you are interested in participating on the Board of Directors, or would like to suggest another member, please email Pat Sexton at the RAB office Pat@RochesterAreaBuilders.com or Jason Scrimshaw, 2023 RAB President, Jason.Scrimshaw@Kimley-Horn.com.

40 BELOW PROFESSIONAL DEVELOPMENT

Tax and Accounting Considerations when Starting your Business

DATE: Tuesday Oct 17, 2023

TIME: 7:30 AM - 8:45 AM

LOCATION: Charlie’s Eatery & Pub - 1654 Hwy 52 N, Rochester

COST: $20 - 40 Below Members

$30 or Free with Membership Application - Non 40 Below Members

Breakfast included

7:30am Breakfast | 7:50am

Welcome/Announcements | 8:00am Taxes

During this presentation, we will cover:

Different tax structures when choosing your business

Presented by:

Kurt Lentz - Smith Schafer & Associates, Ltd.

Amanda Kedrowski - Smith Schafer & Associates, Ltd.

Home Style: Walkout Ranch

This beautiful home is sure to please! With it’s wooded setting and custom detail, this home is a must see! This home offers many ceiling and wall details, custom tile, custom built cabinets, personalized crafting room, and paver patios with custom landscaping.

$936,000 (Not Including Lot)

6349 MERILANE PL NW ROCHESTER

Subdivision: Friederichs Forest

Exterior: Stone, LP, Cedar

Amenities

Custom ceiling and wall details

Custom tile work

Personalized crafting room

Custom cabinets

Open floor plan

Paver patios and landscaping

4440 Finished Sq/Ft

980 Garage Sq/Ft

4440 Total Sq/Ft 05 Bedroom

03

Bathroom

N/A HERS RATING

DERBY BUILDERS

507.421.6396 • derby.builders • License #BC528487

Member of RAB since 2007

Home Style: Modern Rambler

The modern design and finishes blend sleek aesthetics with functionality, creating an inviting atmosphere throughout. Experience the relaxing combination of white oak cabinetry and hardwoods with dark painted trim during your visit. The rear covered porch overlooks the wooded back yard for privacy.

MAPLEWOOD CUSTOM HOMES

507.251.8851

• maplewoodcustomhomes.com

Member of RAB since 2003

• License #BC296720

$894,900 (Including Lot)

4175 CASSIDY RIDGE DR NE ROCHESTER

Subdivision: Cassidy Ridge 4th

Exterior: LP SmartSide Engineered Hardwood

Amenities

Modern walkout rambler

Large wooded walkout lot

New subdivision

3243 Finished Sq/Ft

900 Garage Sq/Ft

3464 Total Sq/Ft 04

Bathroom

Bedroom 03

44 HERS RATING

Home Style: Townhome

Spacious living room with a cozy fireplace and access to the covered front deck! There's plenty of storage space in the lower level and garage area too. All 3 bedrooms on one level, with large walk-in closets. You'll enjoy your evenings on the back patio or front deck, and delight in entertaining your guests in this fabulous home!

$486,900 (Including Lot)

1590 BRANDT DR NE BYRON

Subdivision: The East Village

Exterior: Stone, Vinyl

Amenities

Oversized covered front deck

Gas fireplace

Main floor laundry

Walk-in closets

2273 Finished Sq/Ft

528 Garage Sq/Ft

2775 Total Sq/Ft

03 Bedroom 03 Bathroom

47 HERS RATING

BIGELOW HOMES

507.529.1161 • bigelowhomes.net • License #BC431673

Member of RAB since 1984

HOUSEHOLD REAL ESTATE VALUE JUMPS IN THE SECOND QUARTER

BY JESSE WADE on SEPTEMBER 12, 2023

The second quarter of 2023 release of the Z.1 Financial Accounts of the United States indicates that the market value of households’ real estate assets increased over the quarter. Low existing for-sale inventory helped to increase real estate value after falling for three consecutive quarters.

The level of households’ real estate assets increased by $2.43 trillion from $42.07 trillion in the first quarter of 2023 to $44.50 trillion in the second quarter of 2023, a 5.78% increase. This was the first quarterover-quarter increase since the second quarter of 2022. The market value of owneroccupied real estate decreased 0.14% on a year-over-year basis from $44.56 trillion a year ago. This marked two consecutive quarters of year-over-year declines in the market value of real estate assets, the first occurrence since the second quarter of 2012.

Real estate secured liabilities of households’ balance sheets, i.e., mortgages, home equity loans, and HELOCs, increased over the second quarter from $12.76 trillion to $12.85 trillion, a 0.71% quarterly increase. Year-over-year, real estate liabilities have increased 4.14% from $12.34 trillion in the second quarter of 2022. The year-over-year growth of real estate liabilities has fallen from 9.96% in the first quarter of 2022 but remains positive.

Aggregate owners’ equity (i.e., the difference between homeowners’ real estate assets and liabilities) rose from $29.31 trillion to $31.65 trillion, representing 71.12% of all owner-occupied household real estate.

BUILD COMPETITION BLOCK KIDS

S A T U R D A Y , O C T . 2 8

8:45AM - 11:30AM

RCTC’S HEINTZ CENTER

Open to 3rd & 4th graders

The Block Kids Building Program is a national building competition for children in K - 5th grades and introduces them to construction careers. Participants are asked to create something construction related without adult help or guidance using approved materials and introduces them to construction careers.

THIS IS A FREE EVENT!! REGISTRATION DEADLINE IS OCTOBER 12.

INFLATION ACCELERATES FOR SECOND STRAIGHT MONTH

BY FAN-YU KUO on SEPTEMBER 13, 2023

Consumer prices in August saw the largest monthly gain since June 2022, primarily driven by a surge in gasoline costs. Core service inflation excluding housing was little changed in August, suggesting that the path toward disinflation ahead still has some fluctuations. Meanwhile, shelter costs continued to remain at a high level and was the second-largest contributor to the increase in inflation.

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 further later in 2023, supported by real-time data from private data providers that indicate a cooling in rent growth.

In August, the indexes for gasoline (+10.6%) and shelter (+0.3%) were the largest contributors to the increase in the headline CPI. Meanwhile, the indexes for lodging away from home (-3.0%), used car and trucks (-1.2%) as well as recreation (-0.2%) declined in August.

The index for shelter, which makes up more than 40% of the “core” CPI, rose by 0.3% in August, following an increase of 0.4% in July. The indexes for owners’ equivalent rent (OER) increased by 0.4% and rent of primary residence (RPR) increased by 0.5% over the month. Monthly increases in OER have averaged 0.5% over the last eight 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 3.7% in August, following a 3.2% increase in July. The “core” CPI increased by 4.3% over the past twelve months, following a 4.7% increase in July. This was the slowest annual gain since October 2021. The food index rose by 4.3% while the energy index fell by 3.6% 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 0.2% in August.

The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.6% in August on a seasonally adjusted basis, following an increase of 0.2% in July. The price index for a broad set of energy sources rose by 5.6% in August as all the major energy component indexes increased. Excluding the volatile food and energy components, the “core” CPI rose by 0.3% in August, following an increase of 0.2% in July. Meanwhile, the food index increased by 0.2% in August with the food at home index rising 0.2%.

ROCHESTER BUILDING PERMITS

YEAR TO DATE STATISTICS

TCPA BUILDING PERMITS

OLMSTED COUNTY PERMITS YTD

PINE ISLAND BUILDING PERMITS

HOUSING STARTS LOWER ON RISING MORTGAGE RATES

BY DANUSHKA NANAYAKKARA-SKILLINGTON on SEPTEMBER 19, 2023

Higher mortgage rates averaging above 7% put a damper on single-family production in August, as builders also continue to face supply-side challenges in the form of elevated construction costs, a lack of skilled labor and a shortage of buildable lots.

Led by a sharp decline in multifamily production, overall housing starts declined 11.3% to a seasonally adjusted annual rate of 1.28 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

The August reading of 1.28 million starts is the number of housing units builders would begin if development kept this pace for the next 12 months. Within this overall number, single-family starts declined 4.3% to a 941,000 seasonally adjusted annual rate. The three-month moving average (a useful gauge given recent volatility) edged down to 951,000 starts, as charted below. On a year-over-year basis, single-family housing starts are up 2.4% compared to August 2022. However, single-family housing starts are down 15.1% on a year-to-date basis.

The multifamily sector, which includes for-rent apartment buildings and condos, decreased 26.3% to an annualized 342,000 pace for 2+ unit construction in August. The three-month moving average for multifamily construction has been trending down to a 431,000-unit annual rate. On a year-over-year basis, multifamily construction is down 41.6%. On a year-todate basis, multifamily starts are down 29.3% for 2-4 units and 6.6% for 5+ units.

On a regional and year-to-date basis, combined single-family and multifamily starts are 22.8% lower in the Northeast, 13.6% lower in the Midwest, 8.8% lower in the South and 16.5% lower in the West.

As an indicator of the economic impact of housing, there are now 676,000 single-family homes under construction. This is 16.3% lower than a year ago. Meanwhile. there are currently over 1 million apartments under construction. This is up 13.2% compared to a year ago (894,000). Total housing units now under construction (single-family and multifamily combined) are 0.8% lower than a year ago.

Overall permits increased 6.9% to a 1.54 million unit annualized rate in August. Single-family permits increased 2.0% to a 949,000 unit rate. Single-family permits are also up 7.2% compared to a year ago. Multifamily permits increased 15.8% to an annualized 594,000 pace but multifamily permits are down 15.3% compared to August 2022, which is a sign of future apartment construction slowing.

Looking at regional permit data on a year-to-date basis, permits are 22.9% lower in the Northeast, 17.2% lower in the Midwest, 13.3% lower in the South and 18.2% lower in the West.

Exclusive Incentives on your next vehicle available for NAHB Members

This full-line fleet just went corporate.

The Nissan Business Advantage is a one-stop fleet shop for all your corporate needs. With America’s only full-line fleet import brand,* it’s the perfect addition to help your business reach its goals. Get ready to handle all your fleet needs from vans to sedans.

nahb.org/nissan

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

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

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