So up to this point I have only given a big overview of what the benefits of lease options can be. But I haven’t spent time in detail on each thought. This may shed some insight to why a lease option makes sense vs. where you may be at right now.
The first benefit I would like to talk about is probably an area that we have heard a great deal of commotion about over the last year, no, its not politics although it does have to do with our economy…have you guess it? Its appreciation.
If you just listen to the news all day long you may think “what are you talking about, we are in a declining market”. Well despite all the media's infinite wisdom, they may have only got it partly right. Would I agree that our market is not appreciating at the same rate as 2002 – 2004, absolutely. Is our market in the negative, NO WAY!
To answer the question more in detail, if you compare our appreciation rates today to where they were at 2 years ago…then yes they have gone down. But then again our market 2 years ago was definitely not a normal market. Appreciation rates in the double digits each year (some areas had appreciation rates that were double digits each quarter) is not normal! But the fact is that the market we are in right now, in our backyard, is a NORMAL market.
Currently our area is seeing appreciation rates of 7.1% (King County) and if you average out each county (King, Pierce, Snohomish, Kitsap) the entire Puget Sound region is appreciating at 6.08% *. (Condos were at 28% average appreciation for Puget Sound!) Wait a second…”that’s not what the news said, they said that our area was depreciating and in the negative”, well like I said before, they only had it partly right.
*(Seattle Times, 01/22/2008, Elizabeth Rhodes, www.seattletimes.com)
The reason why our market is still appreciating is for 2 main points (and one of them is not because it is so beautiful here, although that’s why I like it). The first main reason is employment. Consider this; right in our back yard we have some HUGE companies fueling our employment rates. Here’s a portion of them, Microsoft (Redmond), Costco (Issaquah), WAMU (Seattle), Weyerhaeuser (Federal Way), Amazon.com (Seattle), Expedia.com (Bellevue), Nordstrom (Seattle), Starbucks (Seattle)…shall I go on?
The 2nd big point has to do with geography. I know what you’re thinking…”I knew you were going to say it was beautiful”…no that’s not what I mean. Take a look at the list above, what do you notice? All the business are in the same areas. The Puget Sound has a nice geographical funnel, mountains to the east, water to the west. Your only option for expansion is north or south. Most states have the ability to expand circular around large employment areas…but not us and most people don’t want to spend more than an hour on I-5 to get to work, so they keep buying locally. This drives prices up; now does it all make sense?
So for our lease option program our clients can expect to see anywhere from 5% - 10% of equity when they finally take over the house in 2 years. This is huge difference compared to waiting 2 years and then purchasing. Not only will home prices be higher if you choose to do that, but you are rolling the dice on what our market can do.
So there you have it. Big benefit in our market today, Appreciation! Get into a lease option and watch your home value go up!
If you would like more information about lease options, visit our website at www.EmpireOptions.com or feel free to give me a call. I am here to help.
Dedicated to Your Financial Success!
Kenton Becker
kentonb@empireoptions.com
Managing Partner / Lakemont Mortgage Specialist
License # 510-LO-36929
http://www.empireoptions.com/
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