A return to banking the old-fashioned way can speed the housing recovery.

July 2011 | By Lawrence Yun
You already know from real-world experience that banks are not lending. But now your experience is backed by hard data from the FDIC. The agency found that in the year ending March 2011, bank deposits rose by $300 billion, assets grew by $80 billion, and profits were up by $12 billion. Yet loan volumes fell $260 billion to $7.24 trillion.
The banking industry's old "3-6-3 rule" says that bankers pay 3 percent interest to depositors, make loans to depositors at 6 percent, and be out on the golf course by 3 p.m. That rule now seems to be replaced with a new 0-0-3 rule: Offer nothing to depositors and nothing to those who want to borrow, and earn 3 percent by buying tradable assets like ­government bonds.
To be sure, profit is not a bad thing. But when banks accumulate profit at the expense of doing what they're in business to do—make loans—they put brakes on the economy.

We might already be seeing the consequences of that, with the economic recovery showing signs of sputtering. So it's of little surprise that pending home sales in April took a tumble, falling 11 percent. Rising gas prices and unusually wet weather contributed to the slowdown. Whether home sales in the months ahead will also fall, we'll have to wait and see. But if these overly tight lending conditions ­worsen, then a price decline in the ­double-digit range is clearly possible. Strategic defaults and foreclosures will rise, and bank balance sheets will deteriorate. A second recession is possible.
But this is a worst-case scenario. What's more likely is that any additional price contractions will be modest. Home values have already fallen considerably, to historically justifiable levels. And in areas where jobs are strong, prices are solid or heading up.

But the lesson is clear: A return to banking the old-fashioned way can speed the housing recovery.

Summer Time and The Livin' is ... HOT!

This has been one of the hottest summers in recorded weather history.  All over the country folks are experincing the record temps making it hard to enjoy the outdoors and harder to cool the indoors.  Our stress level is up and desire to mow, weed, spruce or do any major or minor household project is down.

If you take a drive  through your neighborhood you will no doubt be confronted by brown, crispy grass and droopy flowers. Then you will pass the one house that has been maintained in tip top shape, grrrr what is that guy/gal doing that I am not...

We know the answer, they are being strong and carrying on.  They are watering within the restrictions set by the town or township, they are going out to weed or prune in the evening or in the early morning hours.  They are paying special attention to the spider webs on porches, splotches on windows.  They are keeping the walks and approaches to their homes swept and trimmed.
They are increasing the VALUE of their home.

If the home is listed FOR SALE curb appeal is of even more importance.  If the home next to yours is for sale, looks really great and yours is well, less than stellar, do your neighbor and yourself a favor and spend a little time sprucing it up.  When that home shows better because the potential buyer likes the look of the whole neighborhood, prices go up and everyone wins. When you model what is expected of homeowners in your area regarding home upkeep-you win as well.

Go have a glass of lemonade.