monthly interest

The San Diego area regained its lead position for the strongest home price appreciation over the next 12 months in the most recent update to the U.S. real estate market forecast from Veros Real Estate Solutions. The forecast for December 2010 through December 2011 indicates that select markets in the United States can expect to witness 2.5 percent to 3.5 percent appreciation on home values over the next 12 months, including Washington State's tri-city area, Pittsburgh, Pa., Fargo, N. D., and the Washington, D.C., metro area.

The Central Plains and Texas continue to see positive appreciation compared to prior periods, with generally good forecasts in Texas, Louisiana, Arkansas, Oklahoma, South Dakota, North Dakota and Iowa. A strengthening trend is also spreading to the Midwest with encouraging numbers in parts of Mississippi, Kentucky, Illinois, Indiana and Wisconsin.

The oudook for Florida remains weak. Other especially weak forecasts include Reno/Sparks, Ne v., California's interior, much of Idaho, and western portions of Washington and Oregon.

Deposit rates will remain low in 2011, mainly because the fed funds rate is expected to remain at its current level in the near term, according to a report from Market Rates Insights. Traditionally, deposit rates mirror fluctuations in the fed funds rate, which rises when inflation increases and vice versa. The high unemployment rate, however, will likely delay any near-term rise in the fed funds rate.

The report, Deposit Trends and Projection for 201 1, projects deposit balances will increase mainly due to persistent uncertainty about the prospect of near-term economic recovery causing consumers to gravitate toward the safety and security of FDIC-insured deposits.

Also, deposit balances will continue shifting from term to liquid accounts. Dropping deposit rates have reached a point of minimal yield differentiation between some term accounts and liquid accounts, which will trigger a shift of balances from CDs to money market, savings and checking accounts. Currently, the national average rate on a nine-month CD is the same as the national average on a MM account causing balances of maturing CDs to flow to MM accounts.

Three months of rising confidence among small business owners stalled in December 2010, as fewer see the economy getting better and more see it getting worse, according to the Discover Small Business Watch. The monthly index dropped to 81.6 in December, down 5.6 points from November. The index remains 4.6 points higher than one year ago.

Twenty- five percent of small business owners said the economy is getting better this month, down from 33 percent in November; 51 percent said it is getting worse, up from 46 percent; and 22 percent said the economy is staying the same, up from 17 percent the prior month.

Twenty- five percent of small business owners also expect economic conditions for their businesses to improve in the first half of 2011, a drop from 28 percent a month ago; 26 percent expect conditions to remain the same, up from 24 percent; and 43 percent expect conditions to worsen, down from 44 percent in November.

Twenty-one percent of small business owners will increase spending on business development in the next six months, down from 25 percent in November. Forty-two percent will decrease business development spending, up from 40 percent; and 32 percent do not plan any changes, up from 28 percent last month.

Forty-five percent have encountered temporary cash flow issues within the last 90 days that have caused them to hold off on paying some bills, up from 43 percent in November, while 49 percent have not had cash flow issues; and 6 percent were not sure.

The recession has depleted the savings of 74 percent of small business owners, the same number as last year, while 20 percent said the recession had no impact, and 5 percent saw their retirement savings increase.

on the web

In many ways, we have it so much easierthan our grandparents did. We have the Internet, email, cell phones and microwaves - lots of modern conveniences. But in the banking industry, this does not necessarily hold true. The methods of ensuring a financial institution was compliant in our grandparents'day would surely fail today. Find suggestions on how to navigate compliance today by going to the February issue at banknews.com and clicking on the online-only article/This Is Not Your Grandparents' Compliance."