FOUNDATIONS NEWSLTR APRIL

2024 FEBRUARY 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.

MISSION STATEMENT

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

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.

REVERSE JOB FAIR

MaxAbility’s mission is to maximize career success for people in our community with disabilities. They are hosting a Reverse Job Fair on Thursday, April 25th from 11:15am-12:30pm at 125 Live. In a typical job fair, job seekers approach employers to learn about their business and available positions. At a reverse job fair, employers are encouraged to circulate and talk with job seekers stationed at tables to meet skilled candidates for their open positions. You can register your company here.

WHAT IS THE LEGISLATURE DOING?

As

about

FROM THE PRESIDENT

Rochester Area Builders

We are thrilled to announce that the scholarship application for the 2024 Post-Secondary Scholarships is now available online! These scholarships, generously sponsored by Rochester Area Builders, Inc., the Commercial Builders Council, the Builders Exchange of Rochester, and the Youth Sporting Clay Shoot, aim to support and encourage graduating high school seniors pursuing education in construction-related fields. Here is what to know:

• Multiple non-renewable scholarships ranging from $500.00 to $1,000.00 are up for grabs.

• Open to graduating high school seniors planning to enroll in a postsecondary program in a constructionrelated field, including technical school, trade school, or college.

• All applications must be postmarked by May 8, 2024, to be considered.

• Scholarship recipients will be announced in June 2024.

We encourage all eligible students to seize this opportunity and apply for these scholarships to further their

education and pursue their passions in the construction industry.

In addition to our scholarship program, we are excited to announce that golf registration for our annual golf event will open on April 25th at 8:30 am. Save the date, spread the word, and get ready to tee off!

The after-school program voting has ended, congratulations to Team Bob the Builder and their winning entry in our Playground to Playhouse project! The kids from Kellogg Middle School will spend the next few months creating blueprints, measuring, sawing, nailing, and building their entry! The final product will be raffled off to benefit Family Service Rochester.

There are two great opportunities to network this upcoming week. Join us for our March networking night at Pinske Edge on Tuesday, March 26th and the remodeler’s council relaunch at the Cambria Gallery on Thursday, March 28th. These are two great events to establish new relationships within RAB and stay connected with current ones. Hope you see you all there!

Lastly, get ready to explore the finest homes and developments in southeast Minnesota at the upcoming Rochester Area Builders Showcase Tour of Homes, taking place on April 20-21 and 27-28 from 12:00 PM to 5:00 PM. The Showcase Tour is an excellent opportunity to see the hard work our builders have put in to bring you the best in new construction homes and developments.

Here are some key highlights of the event:

1. Free Admission: This event is open to the public, providing you with a fantastic opportunity to experience the latest home design and construction trends.

2. Diverse Range of Homes: From new construction homes to innovative developments, the Showcase Tour of Homes features a variety of properties to suit different tastes and budgets.

3. Self-Guided Exploration: Wander through the homes and developments at your own pace, allowing you to discover what you truly desire in your dream home and the builders who can make it a reality.

4. Meet the Experts: Chat with builders, designers, and realtors directly associated with each property. This personal interaction allows you to gain insights into the craftsmanship and design philosophy behind each home.

5. RAB Events App: Enhance your tour experience by using the RAB Events App. Access on-demand information about the tour, featured homes, and the builders behind them, right at your fingertips.

6. Comprehensive Guidebook: Pick up a printed booklet at any physical location or our office, or access it digitally on our site. This guidebook provides an easy-to-read map, stunning photos, and detailed information about each entry, helping you make the most of your tour.

7. Support Local Talent: We take pride in representing some of southeastern Minnesota’s most knowledgeable and talented residential designers and builders. The Showcase of Homes serves as a bridge between clients and builders, connecting consumers to the best options for their needs.

We sincerely appreciate your support of the Rochester Area Builders, and we hope you thoroughly enjoy the Showcase of Homes. Whether you’re looking for inspiration, considering a new construction project, or simply love exploring beautiful homes, this event promises to be a memorable experience.

Thank you for being a part of this exciting showcase, and we look forward to seeing you on the tour!

Adam Giannini Knutson Construction 2024 RAB President

ADAM GIANNINI President

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

April 2024

RAB Networking Night

6

Rochester Area Builders

2024 Calendar of Events

4

June 6th Willow Creek Golf Club

11:00am Shotgun Start

REGISTRATION OPENS

APRIL 25TH AT 8:30AM

Contact Shelly with questions

GOLDEN TEE SPONSOR

KELLOGG AFTERSCHOOL PROGRAM

THANK YOU TO OUR MEMBERS WHO ARE HELPING WITH THIS PROJECT.

Ryan Jongeling - The Design Connection

Jay Burke - Heartwood Homes

James Coyle & Jerry Newman – City of Rochester

Pedro & Michael - Peak Remodel & Design Solutions

Brandon Paxton - Paxton Electric

Krista Weisz - Design Studio B

Crystal Hughley - Eagle Rock Bank

John Eischen - Carpet One of Rochester

·

LABOR SHORTAGES EASE, BUT REMAIN WORSE THAN IN THE LAST BOOM

BY PAUL EMRATH on FEBRUARY 23, 2024

With home building volumes lower, labor shortages have eased considerably since record levels set in 2021 but remain relatively widespread in a historic context, according to results from the latest NAHB/Well Fargo Housing Market Index (HMI) survey.

The February 2024 HMI survey asked builders about shortages in 16 specific trades. The percentage of builders reporting a shortage (either some or serious) of labor they employ directly ranged from a low of 33% for landscape workers to a high of 65% for those performing finished carpentry.

The finished carpentry shortage was down from 72% in 2023 and an all-time high of 85% in 2021 but remains higher than it was at any time during the 2004-2006 housing boom (when it reached a temporary peak of 58% in July 2005). Most of the labor shortage percentages in the above figure follow a similar historic pattern.

In the typical case, most of the physical work required to build a home is performed not by laborers employed directly by the builders, but by subcontractors. As a 2020 NAHB study showed, builders on average use two dozen different subcontractors and subcontract out 84% of their total construction costs to build a single-family home.

The February 2024 HMI survey also collected information about shortages of subcontractors. The percentage of builders reporting a shortage of subcontractors ranged from 35% for building maintenance managers to 63% for finished carpenters.

For all 16 trades, the shortage percentages for subcontractors and labor directly employed were fairly similar. Averaged over the nine trades that NAHB has covered in a consistent way since the 1990s (carpenterrough, carpenter-finished, electricians, excavators, framing crews, roofers, plumbers, bricklayers/masons, and painters), the share of builders reporting shortages in February 2024 was 52% for labor directly employed and 51% for subcontractors.

The two numbers have not always been this close. After 2012, as housing markets started to recover from the Great Recession, a 5- to 7-point gap opened up between the 9-trade average shortage of subcontractors and labor directly employed by builders, with the subcontractor shortages being consistently more widespread. NAHB’s analysis at the time indicated that workers who were laid off and started their own trade contracting businesses during the Great Recession started returning to work for larger companies—improving the availability of workers directly employed by builders while shrinking the pool of available subcontractors. After persisting for a decade, the subcontractor-direct labor gap finally narrowed in 2023 and disappeared entirely in 2024.

The current 9-trade average shortage of 52% for labor directly employed is down from 58% in 2023 and a record-high 77% in 2021 but remains elevated in historical perspective—especially when considered relative to housing starts.

During the boom period of 2004-2006, total housing starts were consistently over 1.8 million annually—as high as 2.0 million in 2005. Despite this high rate of construction, the 9-trade shortage percentage never exceeded 45% during the boom. In comparison, the current shortage percentage of 52% occurred against a backdrop of 1.4 million starts in 2023 and an annual rate of 1.3 million recorded so far in January of 2024.

A R E Y O U A F E M A L E I N T H E C O N S T R U C T I O N I N D U S T R Y

L O O K I N G F O R A F U N , S U P P O R T I V E G R O U P ?

J O I N N A W I C T O D A Y !

F o r m o r e t h a n 5 5 y e a r s , N A W I C h a s h e l p e d w o m e n t a k e a d v a n t a g e o f t h e o p p o r t u n i t i e s i n c o n s t r u c t i o n . W h e t h e r y o u w a n t t o e m b a r k o n a n e w c a r e e r , g r o w y o u r b u s i n e s s , e s t a b l i s h a r e l i a b l e n e t w o r k i n g b a s e , b e c o m e a m e n t o r / m e n t e e , m a k e a d i f f e r e n c e i n y o u r c o m m u n i t y , c o n t i n u e y o u r e d u c a t i o n , o r i n v e s t i n g r e a t f r i e n d s h i p s w i t h o t h e r w o m e n i n t h e i n d u s t r y N A W I C o f f e r s a v a r i e t y o f o p p o r t u n i t i e s l a r g e a n d s m a l l .

U p t o $ 8 , 0 0 0 i n s c h o l a r s h i p s a r e a v a i l a b l e f r o m

N A W I C S E M N C h a p t e r 3 4 6 !

W H Y J O I N N A W I C ?

B e p a r t o f a n e t w o r k o f l i k e - m i n d e d w o m e n L e a r n a b o u t t e c h n i c a l & l e a d e r s h i p s k i l l s E d u c a t i o n a l o p p o r t u n i t i e s N e t w o r k i n g

W H O S H O U L D J O I N ?

H o m e B u i l d e r s & R e m o d e l e r s A r c h i t e c t s & E n g i n e e r s

C o n s u l t a n t s

C o m m e r c i a l G C s

R e s i d e n t i a l C o n s t r u c t i o n S p e c i a l t y C o n t r a c t o r s

L a b o r U n i o n s

M e r i t S h o p s

R O L E S T H E Y F I L L

S a f e t y m a n a g e r s

P r o j e c t & O f f i c e

A s s i s t a n t s

E s t i m a t o r s

I n t e r i o r D e s i g n e r s

B u s i n e s s D e v e l o p m e n t M a r k e t i n g

C r e w M e m b e r s

N A W I C S E M N C h a p t e r 3 4 6 b a s e d o u t o f R o c h e s t e r i s 4 5 + m e m b e r s s t r o n g !

BUILDERS’ TOP CHALLENGES FOR 2024

BY ASHOK CHALUVADI on JANUARY 24, 2024

According to the January 2024 survey for the NAHB/Wells Fargo Housing Market Index, high interest rates were a significant issue for 90% of builders in 2023, and 77% expect them to be a problem in 2024. The second most widespread problem in 2023 was rising inflation in US Economy, cited by 83% of builders, with 52% expecting it to be a problem in 2024.

The cost and availability of labor was a significant problem to only 13% of builders in 2011. That share has increased significantly over the years, peaking at 87% in 2019. Fewer builders reported this problem in 2020 (65%), but the share rose again in 2021 (82%) and 2022 (85%). The share eased slightly in 2023 to 74%. A similar 75% expect the cost and availability of labor to remain a significant issue in 2024.

In 2011, building materials prices was a significant problem to 33% of builders. The share has fluctuated over the years, from a low of 42% in 2015 to a peak of 96% in 2020, 2021, and 2022. The slowdown in single-family construction in 2023 made this less of a problem for builders last year, as ‘only’ 63% reported it as a significant issue. Fewer expect it to face it in 2024 (58%).

Compared to the supply-side problems of materials and labor, problems attracting buyers have not been as widespread, but builders expect many of them to become more of a problem in 2024. Buyers expecting prices or interest rates to decline if they wait was a significant problem for 71% of builders in 2023, with 77% expecting it to be an issue in 2024. Negative media reports making buyers cautious was reported as a significant issue by 56% of builders in 2023, and 54% expect this problem in 2024. Concern about employment/economic situation was another buyer issue for 48% of builders in 2023, but 55% anticipate this issue in 2024. Gridlock/uncertainty in Washington making buyers cautious was a significant problem for 42% of builders in 2023, but a larger 54% expect it to be a problem in 2024. Less than 30% of builders experienced problems in 2023 with buyers being unable to sell existing homes, potential buyers putting off purchase due to student debt, and competition from distressed sales/foreclosures.

For additional details, including a complete history for each reported and expected problem listed in the survey, please consult the full survey report

Presented By:

Sponsored By:

April 20 - 21 & April 27 - 28, 2024

YEAR TO DATE STATISTICS

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

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

STRONG REBOUND IN SINGLE-FAMILY PERMITS AT THE START OF 2024

BY DANUSHKA NANAYAKKARA-SKILLINGTON on MARCH 15, 2024

Over the first month of 2024, the total number of singlefamily permits issued year-to-date (YTD) nationwide reached 75,906. On a year-over-year (YoY) basis, this is an increase of 43.1% over the January 2023 level of 53,062.

Year-to-date ending in January, single-family permits were up in all four regions. The range of permit increase spanned 67.0% in the West to 19.4% in the Northeast. The South was up by 39.4% and the Midwest was up by 36.5% in singlefamily permits during this time. For multifamily permits, the regions were split, with half posting increases and the other posting decreases. The Northeast was up by 64.5% and the Midwest was up by 13.6%. The South posted a decline of 32.5% and the West declined by 27.9% in multifamily permits during this time.

Between January 2024 YTD and January 2023 YTD, 44 states posted an increase in single-family permits. Five states and the District of Columbia reported declines in single-family permits. Connecticut reported no change. The range of increases spanned 128% in Nevada to 2.4% in Mississippi. The ten states issuing the highest number of single-family permits combined accounted for 67.7% of the total single-family permits issued. Texas, the state with the highest number of single-family permits issued 12,707

permits over the month of January, which is an increase of 55.8% compared to January 2023. The succeeding highest state, Florida was up by 40.4% while the next highest, North Carolina, posted an increase of 30.6%.

Year-to-date, ending in January the total number of multifamily permits issued nationwide reached 38,870. This is 18.9% below the January 2023 level of 47,936.

Between January 2024 YTD and January 2023 YTD, 21 states recorded growth in multifamily permits, while 29 states and the District of Columbia recorded a decline. Wyoming (+377.8%) led the way with a sharp rise in multifamily permits from nine to 43, while Alaska had the greatest decline of 100% from 54 to zero. The ten states issuing the highest number of multifamily permits combined accounted for 68.1% of the multifamily permits issued. Over the month of January, Texas, the state with the highest number of multifamily permits issued, experienced a decline of 25.1%. Following closely, the second-highest state in multifamily permits, Florida, saw a decline of 30.3%. California, the third largest multifamily issuing state, declined by 33.6%.

At the local level, below are the top ten metro areas that issued the highest number of single-family permits. For multifamily permits, below are the top ten local areas that issued the highest number of permits.

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

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.