ORLANDO, Fla. — Forget the whole “till death do us part” thing.
Many unhappy couples are now calling it quits, divorce attorneys and real-estate agents say, for one simple reason: Home prices have been rising, which means they can finally get some start-over cash out of houses that used to be underwater.
“So many couples have been living together and biding their time,” Orlando lawyer Leigh Sigman said. “I know many people who have coasted for years and touched base with me periodically — until they got equity in their homes.”
Before the 2007-09 recession, couples who divorced vied first for the children and then for the real-estate assets, Sigman said. But once the economic downturn stripped houses of half their value, the one-time happy abode became the hot potato that no one wanted in a divorce because it came with a mountain of mortgage debt — “worse than credit cards,” Sigman said.
For better, for worse — or at least until the house can sell for a profit?
Lawyers and real-estate agents say what’s happening is obvious: After years of slumping business, things have picked up now that home values have improved.
Stan Humphries, chief economist for the Seattle-based real-estate-research firm Zillow Inc., said a decrease in the percentage of underwater homes has allowed more homeowners to sell at a profit so they can finally move. And that has allowed more couples to make marital decisions without worrying about a distress sale ruining their credit.
“They can now sell, liquidate their assets and go their separate ways,” said Humphries.
Some real-estate agents say the drop in homes with negative equity has spurred their business with both divorcing couples and divorcees.
Orlando real-estate agent Robert Tenaglia said he was recently at a Realtor function when an agent commented to a small group: If it wasn’t for divorce, I’d have no business now.
“I have seen many of the deals we’re doing have involved a divorce — selling a house because of it or buying because of it,” said Tenaglia, managing broker for Realty Executives. “When people don’t have equity and don’t have money, it dissuades them from going through the final step.”
Getting even a little equity out of a house sale helps cover what can be some pretty hefty costs to get restarted with a new down payment or apartment deposits, Tenaglia said. Even though it’s an unhappy time for couples, the formation of new households helps spur the economy as newly single consumers purchase furniture, utilities and other services.
Orlando lawyer Justin Clark said the main issue is that couples sometimes stay together simply because they don’t have enough money to leave each other.
“In the past, you could count on money from a sale to help you start over,” he said.